Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Oral Answers to Questions — DEFENCE

The Secretary of State was asked—

Reserve Forces

Mr. Bayley: If he will make a statement about the role of the reserve forces. [31403]

The Minister for the Armed Forces (Dr. John Reid): The reserve forces support the armed forces in a wide range of operational circumstances. We very much value that contribution, and the link that they form between military life and the civilian community. Their roles are being taken fully into account in our work on the strategic defence review, and our main priority is to make our reserve forces as usable and effective in future as they have been in the past.

Mr. Bayley: Is my hon. Friend aware that, in the past two years, the 3rd battalion of the Prince of Wales's Own Regiment of Yorkshire, which is based in my constituency, has supplied a total of 50 all ranks to support regular forces in a wide range of locations around

the world, including Bosnia? Do not the Territorial Army and other reserve forces have a vital role to play in supporting our regular forces and ensuring that we achieve our military objectives, including humanitarian and peacekeeping objectives? Will he ensure that that is properly taken into account during the strategic defence review, and reflected in the White Paper when it is published?

Dr. Reid: Yes. We should all wish to pay tribute to the role that has been played, not only by the 3rd battalion of the Prince of Wales's Own Regiment of Yorkshire, but by the other Territorial Army units, which have done so well in providing members for our activities, not least in Bosnia. We shall, of course, take account of the utility and effectiveness of the Territorial Army and the contribution that it has made to our operations in the past. Like all other elements of our armed forces, it must be rigorously scrutinised, with the aim of ensuring that, in future, all our reserve forces are as usable and effective in the new circumstances as they have been in the past.

Sir Geoffrey Johnson Smith: Are not combat units the most difficult part of an Army to reinforce? Does the Minister agree that, whereas one can put civilians with specialist qualifications into uniform comparatively easily, the Army is the only organisation that can train people to serve in combat units, and that we neglect at our peril the role of people serving in combat units?

Dr. Reid: We would neglect that area at our peril, which is precisely why the Government have no intention of neglecting it. As the complexity of warfare and the security situation increases, many areas of the battle on land and air and in the sea become extremely complex. Logistics and other areas which, in a flexible, deployable force, in the past may not have received the emphasis that they should have done, are another subject, but I agree with the right hon. Gentleman's point on combat units, which is why we shall place such emphasis on them.

Mr. Linton: Is not the most valuable 2 per cent. of my hon. Friend's budget the part that is spent on the


Territorial Army, especially the infantry battalions—not only because of the links that they forge with local communities, but because of the training role that they play through the Army Cadet force? The London Regiment, whose headquarters are in my constituency, looks after no fewer than 32 Army Cadet force detachments and is greatly valued by the local community.

Dr. Reid: Far be it from me to make invidious comparisons between such elements of the British armed forces. However, I take the point about the importance of the Territorial Army—not only its operational support to the regular Army, but its role as the link between the civilian and military community, its role in the regeneration of forces against, perhaps, a more distant threat, and its role in recruitment and in fostering the Army Cadets movement.

Sir George Young: The Minister will understand the concern in the Territorial Army and the volunteer reserves generated by the strategic defence review, which is studying its role. Originally, we were told that that review would be completed by last December. We were then told it would be completed in the spring. Last week, the Green Paper on the Defence Diversification Agency stated that an announcement would be made "later this year". Can the Minister bring to an end that damaging uncertainty by announcing a firm date by which the review will be both completed and published?

Dr. Reid: If anything, the damage is done by those who would rather have the review rushed than right. Unlike the previous Government, we are carrying out a detailed and in-depth strategic defence review to ensure that our forces are not hollowed out and that they are sustainable, deployable and as effective in the future as they were until relatively recently. Under the Conservative Administration, the Territorial Army had establishment figures of 91,000, which sounded marvellous until we found out that the actual figures were only 75,000. Similarly, when the figure fell to 59,000, we found out that it was actually only 55,000. The stronger the rhetoric from the Conservatives, the weaker the forces that they produced.

Smart Procurement Initiatives

Mr. Hutton: If he will make a statement on the Government's smart procurement initiatives. [31404]

The Secretary of State for Defence (Mr. George Robertson): Smart procurement is a ruthless examination of how value for money from our procurement programme can be improved to ensure faster, cheaper and better delivery of our future requirements.

Mr. Hutton: I thank my right hon. Friend for that reply and welcome the steps that he and the Government have taken to improve the procurement process, which will result in a better deal for the taxpayer and the defence industry as a whole and for my constituency in particular. Is that not the best way to ensure that we avoid the expensive delays, waste and cost overruns that came to characterise the procurement policy of the Conservative party?

Mr. Robertson: My hon. Friend is right and, coming from Barrow, he knows a little about procurement. I know

that he will be feeling a special sense of pride, as will Barrow this week, as HMS Invincible, which was built there, steams home after distinguished duty in the Persian Gulf. On behalf of the taxpayer, we are trying to ensure that the cost and delivery overruns that were the experience of the past are minimised and, hopefully, eliminated.

Sir George Young: The Secretary of State will recall that the Scottish Labour party thought that it would not be smart to continue procuring Trident. Why are he and his hon. Friends so unsuccessful at persuading members of the Labour party in Scotland to adopt pragmatic defence policies? Is that not a case of old Labour fighting back and winning? Does not the clear message from the Scottish Labour party show that defence is not a priority, and does that not seriously undermine the right hon. Gentleman's negotiating position with the Treasury?

Mr. Robertson: No, it does not. The Scottish Labour party conference is entitled to express a view but, since it contradicts the manifesto commitment that we gave at the last election and that we intend to stick to, the decision is merely an expression of opinion. Of course, the Scottish Conservative party got so out of line with the country as a whole that it does not exist any more.

Recruitment Advertising

Sir Sydney Chapman: What amount and proportion of his Department's annual expenditure was allocated to recruitment advertising in 1997–98. [31405]

Dr. Reid: Some £22.71 million was allocated to service and Ministry of Defence civilian recruitment advertising in the financial year 1997–98. That represents 0.1 per cent. of the Department's expenditure allocation for the year.

Sir Sydney Chapman: I am grateful for that reply. On reflection, does the Minister agree that probably the greatest disincentive to recruiting people into our armed services in recent years has been the cases of Privates Clegg and Thain and of Guardsmen Fisher and Wright? Given the extreme anger felt by so many of my constituents at the continuing imprisonment of the two Scots guardsmen, will the hon. Gentleman have a word with the appropriate ministerial colleagues, including the Secretary of State for Northern Ireland, to find out what Government action can be taken, as the issue has now become very much a political one?

Dr. Reid: As the hon. Gentleman would expect, I shall take the same position as all previous occupants of this ministerial post—I shall not intervene in the judicial process. I cannot agree that the issue has had a major effect on the level of general recruitment. The instability and insecurity engendered under the previous Administration—including, whatever their intent, their cack-handed approach to redundancies—and the general lowering of morale all contributed to the desperate situation.
When we inherited this portfolio, all three services were short—the Army was 5,500 soldiers short, and that figure was set to increase to 7,5000. I am glad to be able to tell the House that, for the first time in seven years, the quarterly figures show that the new Government have


stemmed that decline and reduced the shortfall. Even though the increase has been modest, the Government's efforts are beginning to bear fruit.

Ms Squire: Following my hon. Friend the Minister's most welcome announcement, will he agree that those quarterly figures demonstrate that the Government have already had some success in tackling the dreadful shortfall in recruitment in the armed services that they inherited from the previous Government? Will he join me in welcoming the success in Dunfermline in Scotland of the initiative that was developed by Lauder college and Dunfermline's Army recruitment centre, which was so successful in recruiting young unemployed people to the Army that, for the first time, that Army recruitment centre exceeded its recruitment target when it signed up its 100th recruit last week?

Dr. Reid: I extend my congratulations to that recruitment office, which I know has exceeded its target for the first time, and to Lauder technical college on its gateway courses, which we hope will help to inform our approach nationally. Those gateway courses are one of a large range of initiatives that have been introduced since 1 May last year. We take this opportunity to tell anyone outside the Chamber who may read our debates that the armed forces are back in business. There are 25,000 opportunities a year for new recruits to have a rewarding and challenging career with skills and training that are second to none.

Mr. Hancock: I am sure that the whole House will be grateful for what the Minister said about the improvement in the figures. I am also sure that he would agree that the sacking of Major Joyce is hardly something that will excite young graduates or others to want to join the armed forces. What steps will the Government take to improve the situation for well-trained young service men who, sadly, have to rely on state benefits to supplement their incomes? Again, I should have thought that that was a serious impediment to recruitment. Finally, can he tell me whether the recruitment drive around the nightclubs of the north of England, which was announced some months ago in the Chamber, has met with any success?

Dr. Reid: On the first point, that is a personal and personnel matter between Major Joyce and his employer, the Army. It would be quite wrong for me to comment on what is a personal matter, or for Ministers to become involved in it. I merely say that, if the Army Board calls on any soldier to resign or retire prematurely, he can, should he so wish, seek redress against that decision through the chain of command, the Army Board and ultimately the monarch, and then seek judicial review in the divisional court of the High Court.
On the hon. Gentleman's more general questions, I am glad to say that the whole range of instruments to assist in recruitment that have been deployed since the Government came to office have, as I said, begun to bear fruit, although there is a long way to go. On the other question, I have called for an examination of those very few cases in which people have fallen through the net and are in receipt of supplementary benefits. He will be aware that, this year, the Armed Forces Pay Review Body, which is an independent body, ensured that the lower ranks in the armed forces received a higher increase than anyone else in Britain.

Ex-prisoners of War

Mr. Gibb: If he will make a statement on the process by which the complaints of officer ex-prisoners of war and protected personnel regarding pay deducted during incarceration were investigated. [31406]

The Parliamentary Under-Secretary of State for Defence (Mr. John Spellar): In response to a number of submissions from ex-officer prisoners of war and protected personnel, the previous Government established a thorough review to examine the deductions, the pay policy and its implementation. Following the general election, those submissions and the report of the review were presented to me. I considered them with great care and announced my conclusions on 24 July last year. I am satisfied that the process followed was sound. The report is available in the Library, and I commend it to the hon. Gentleman.

Mr. Gibb: Is the Minister aware that one of the leading campaigners on the issue—my constituent, Group Captain Ingle—fought for this country in the Battle of Britain, and was three times shot down and twice wounded in action before becoming a prisoner of war? Why does the Ministry continue to deny the requests of those incarcerated in Germany and Italy in the second world war to be heard and to contribute their first-hand knowledge of the facts of the case?

Mr. Spellar: No one takes away one iota from the record of both Group Captain Ingle and the many other officer personnel who were prisoners of war. Many submitted their views to the Ministry of Defence, and those were considered in the review. The report shows that the facts do not bear out their case. That view was taken by previous Governments. I examined the case with considerable care, and the conclusion was that it did not stand up. It gave me no great pleasure to draw that conclusion, but those were the facts of the matter.

Mr. Rendel: The Minister has told us that he does not agree that the written statements made out the case, but surely the question—to which I should still like an answer—was why those statements, apparently showing that pay that was withheld should now be disbursed, were not, according to those who submitted them, given sufficient weight in the investigation. Would it not have been better to allow the witnesses to give oral evidence, so that they could at least feel that their case had been made directly to the Minister? Perhaps his decision, which is disappointing at best, could thereby have been changed.

Mr. Spellar: A number of representations were made, as well as further follow-up representations. They have been deeply examined, especially in the light of contemporary evidence and the decisions that were taken at the time. Following representations made at the time, those matters were considered by Ministers in the immediate post-war Government, who were much closer to the issue. When we looked back in our review, it appeared that their reasons were sound. That has been the view of successive Governments of different political complexions.

Mr. Winnick: I do not remember many protests from Tory Members in the previous Parliament, or at any time


in the past 18 years. That said, is my hon. Friend aware that some Government Members are unhappy—I certainly am—because we are not sure that the right decision was made? Bearing in mind the services of the ex-officers and their bravery in the most just war that this country has ever been engaged in—a war that has been over for 53 years—the matter should be re-examined.

Mr. Spellar: Not only the prisoners of war, but all those who served in the armed forces in the war, deserve our enormous and unending gratitude. We had to consider the facts concerning the deductions of pay from officer prisoners of war and protected personnel and determine whether there was a case for making repayments to them after the war.
Successive Governments have reviewed the case. The previous Government instituted a most thorough investigation, the papers from which were presented to me when we came into office. I looked through those papers with considerable care, and I am afraid that the case that was being advanced did not stand up.

Mrs. May: Does the Minister accept that former officer prisoners of war and protected personnel who had their pay docked when they were incarcerated in POW camps—and their families—feel a genuine sense of injustice? They feel that they have facts that bear out their case and they have—as, indeed, has one of my constituents—raised real questions about the report to which the Minister referred. To satisfy the feeling that there are facts and records to bear out that sense of injustice, is not now the time to call for an independent inquiry, so that people can present their evidence orally, as the hon. Member for Newbury (Mr. Rendel) suggested, and feel that a decision is being made independently of Government?

Mr. Spellar: The hon. Lady should understand that her Government came to a similar conclusion. Her views are not universally held by ex-officer prisoners of war, several of whom have written to the papers expressing the view that they do not wish to be associated with the campaign. There would be a reason for setting up an independent or a different inquiry if all those who had examined the case in depth and in detail had not concluded that the case is not made and that the facts do not bear out the claims. Therefore, I believe that we have come to the right conclusion, as did previous Governments of both political parties.

Ethnic Minorities

Jane Griffiths: What targets his Department have set to increase the number of people from ethnic minorities in Britain's armed forces. [31407]

Dr. Reid: The Government are determined that access to the armed forces is open to the widest possible reservoir of talent and, as part of that, the armed forces should better reflect the ethnic composition of our society. As part of that commitment, for the year starting in April, the goal for each service will be that 2 per cent. of new recruits this year should be from the ethnic minorities, with the figure rising annually by 1 per cent., so that it

reaches 5 per cent. by the end of the financial year 2001–02 and, in time, reflects the proportion of people from ethnic minority communities in the wider population.

Jane Griffiths: I thank my hon. Friend for that reply. What targets have been set for the Household Division, which, under the previous Government, was singled out for criticism by the Commission for Racial Equality?

Dr. Reid: Exactly the same targets have been set for the Household Division. I wish to express my gratitude for the way in which the Household Division has tackled the issue. We are working in partnership with the Commission for Racial Equality, and I have been impressed by the determination of the leadership of the Household Division, which stems from the reasons that I mentioned earlier—the effectiveness of our armed forces and their ability to recruit from the widest possible reservoir of talent—and is nothing to do with political correctness. I have been impressed by the commitment to pursuing that agenda that has been shown by the leadership.

Mr. Soames: I congratulate the Minister on the progress that he is making on a difficult, but essential and worthwhile, task. Does he agree that all three services have long recognised that it was not being done as well as it should be, and that they are determined to achieve much better figures? Is it not important that, when possible, members of the ethnic minorities should be able to serve together in bigger blocks than just one or two, which would make them feel more comfortable and perhaps would give them a better start?

Dr. Reid: Yes, I am glad to respond positively to both those points. No one should be under any illusions that the issue is not difficult and complex. The answer does not lie entirely with the armed forces, and we are building on the previous relationship with the Commission for Racial Equality. On the hon. Gentleman's second point, as we move on from a situation in which individuals are isolated, and therefore more exposed to those elements whom we wish to remove from the armed forces, it is better if larger numbers can be kept together for the sake of solidarity in the wider group. The hon. Gentleman's point is well taken.

Persian Gulf

Mr. Miller: If he will make a statement on the deployment of British troops to the Persian Gulf. [31409]

Mr. George Robertson: HMS Invincible, now relieved by HMS Illustrious, and all our service and civilian personnel deployed to the Gulf, have made a valuable contribution in helping the United Nations Secretary-General achieve an agreement with Iraq. Our forces will remain there to ensure that the agreement Saddam Hussein's Government have entered into is tested, adhered to and obeyed.

Mr. Miller: I thank my right hon. Friend for that answer. Does not the agreement signed between Saddam Hussein and Kofi Annan represent a victory for diplomacy backed by the threat of force? In the light of my right hon. Friend's remarks about what is happening


now, is it not important that our troops remain deployed until we are certain that Saddam Hussein meets his agreement?

Mr. Robertson: My hon. Friend is right to say that the lesson of the agreement achieved by Kofi Annan in Baghdad is that diplomacy without the threat of force would not have produced the result that the world felt so relieved about. The United Nations Secretary-General's words—
You can do a lot with diplomacy but of course you can do a lot more with diplomacy backed up by firmness and force"—
are the ultimate vindication of the decision of the United States and Britain, along with a growing coalition of others, to ensure that such force was put in place.
My hon. Friend is also right to say that we cannot take Saddam Hussein's word for granted. Others have done so, and his people may have taken his word. The reality is that, unless the potential for the use of force is still there, until we are sure that he will adhere to the agreement, we cannot be certain that he will behave in accordance with what the United Nations has laid down as the norm for the future.

Dr. Julian: Lewis: Is the Secretary of State aware that to deploy forces in far-flung theatres such as the Persian Gulf, it is vital to have anti-submarine warfare capabilities? Will he comment on the grave concerns expressed in a letter in The Times on 5 March by Sir Patrick Duffy, a Navy Minister in the previous Labour Government, about the proposal that the 12-strong hunter-killer submarine fleet is likely to be cut in the strategic defence review?

Mr. Robertson: Sir Patrick Duffy, who is a good friend of mine, was one of those consulted during the many discussions that we had in the strategic defence review. I know his strong view about naval power in the future. The strategic defence review will take account of all potential threats to Britain's security interest, and will reach a balanced outcome.

Mrs. Gilroy: Will the Secretary of State confirm that, since the end of the Gulf war, Saddam has spent some $1 billion developing 45 so-called palaces while his people are starving? Do not that and the expenditure on the programme of weapons of mass destruction show that Saddam, not the west, is responsible for the suffering of the Iraqi people?

Mr. Robertson: My hon. Friend is right. There is an iniquitous aspect to the propaganda put out by Saddam that we in the rest of the world are responsible for the suffering of his people because of the imposition of sanctions. He alone is responsible for the sanctions regime being in place, and for it being in place so long. As she rightly says, an expenditure of some $1.2 billion since the Gulf war on building 40 lavish presidential palaces is astounding. His people would be appalled if they knew of it. The new oil-for-food resolution, 1153, allows the Iraqi regime to spend $5.2 billion every six months on essential food and medicines. The track record suggests that he will not use it correctly but we must hope that, having been given that flexibility, the poor people of Iraq will benefit from it.

Mr. Key: The whole House was immensely proud of our forces in their recent deployment to the Gulf, and we

remain concerned for their safety. Given the changing nature of the threat, the increased threat of chemical and biological weapons, and the fact that our main ally, the United States, is embarked on a programme to inoculate all its service men and women against anthrax in the next couple of years, can the right hon. Gentleman explain why the offer of inoculation to our troops in the Gulf was left so late this time? Is it his policy that inoculation will remain voluntary, and will those inoculations be recorded by a new system, as envisaged by the previous Government?

Mr. Robertson: In the spirit of bipartisanship, I shall simply respond factually to those questions. I hope that the hon. Gentleman has noticed that the announcement of the decision to vaccinate against anthrax was taken simultaneously by the American Government, the British Government and the Canadian Government last week: that was not an accident. Although the threat assessment is still low, the danger still exists.
The independent medical panel of experts that I set up advocated the inoculation of those in the theatre with anti-anthrax vaccine, and that has now gone ahead. The Americans will use their own vaccine, but we were able to supply the Canadians with the vaccine that will be used for our troops. We believe that it is safe: indeed, so satisfied was I of that, that I, the Chief of the Defence Staff, my hon. Friend the Minister for the Armed Forces and the Surgeon-General all took the vaccine last week; we shall continue with the other three injections required for the course.
There will be complete documentation of all inoculations given. I am strongly urging all our troops in the area voluntarily to have the vaccination on the ground that it will be good for them and give them a protection that they require.

Land Mines

Mr. Sarwar: What action his Department is taking in relation to anti-personnel land mines. [31410]

Ms Southworth: What steps his Department is taking to help those involved in humanitarian demining. [31414]

Mr. George Robertson: The Government have been at the forefront of international moves towards a global ban on anti-personnel land mines and in providing assistance to humanitarian demining. We shall soon destroy about 1 million anti-personnel land mines, keeping only a very small number needed for training in mine clearance. We have also established a mine information and training centre.

Mr. Sarwar: Will my right hon. Friend join me in paying tribute to the late Diana, Princess of Wales for her contribution to raising awareness of land mines, which have killed thousands of innocent men, women and children throughout the world? Does he agree that the British Army is doing an excellent job and playing a major role in eradicating land mines? Will he tell the House what further steps he intends to take during our presidency of the European Union to eradicate land mines, which are killing almost 70 people a day?

Mr. Robertson: My hon. Friend is right to point to the pioneering work of Diana, Princess of Wales in drawing


attention to the land mine menace, which still plagues our planet. Her legacy will continue through the Ottawa treaty, which was signed by many countries that are now dedicated to eradicating the weapon from the earth. I assure my hon. Friend that we shall continue to use the formidable expertise of the British Army and to ensure that it is able to help not only other military agencies but the civil and humanitarian charitable community in dealing with a weapons system that has damaged or killed many millions of people and has the potential to continue to do so in future.

Ms Southworth: My right hon. Friend will not be surprised to learn that I have received considerable representation from my constituents, who share my horror at the threat land mines pose to the life and health of children living in many countries. Will he investigate the possibility of his Ministry providing equipment to people working on humanitarian de-mining, so that we can make progress toward ending the tragedies that happen every day?

Mr. Robertson: I welcome my hon. Friend's concern, which is shared by many thousands of people in this country and millions around the globe. Her horror and outrage is well reflected within the Government. I can announce today that we are about to gift to the Halo trust—an organisation with which Princess Diana had much to do—10 surplus Volvo medium-wheel tractors, valued at £125,000. They will increase considerably the rate of mine clearance and the safety of operators once the Halo trust has suitably armoured them. We believe that this is a good and meaningful contribution to the work being done by that agency, and we shall look at what else we can do. I am extremely proud that this Government have led the way in the campaign against anti-personnel land mines. They are a blight on the face of the earth, and the sooner they are outlawed for ever, the safer our world will be.

Mr. Clifton-Brown: I am glad that the Secretary of State mentioned the Halo trust. Is he aware that that trust and other non-governmental organisations are doing much brave and dedicated work clearing anti-personnel land mines throughout the world, including Afghanistan? Is he also aware that British troops in Bosnia are clearing a large number of anti-personnel mines? It is difficult and dangerous work, and there does not seem to be any co-ordinated effort between the stabilisation force and the large number of countries that are participating in the work in Bosnia. Will the Secretary of State undertake to raise that matter in the United Nations to see whether there can be a co-ordinated effort to have a strategic plan to clear the mines?

Mr. Robertson: I welcome the hon. Gentleman's interest and concern and agree that a bipartisan approach, which should be built on, is being taken on anti-personnel land mines. The expertise of our armed forces in the area can rightly and properly be put to much use, which is what I have tried to do since Labour came to office 10 months ago.
I am a bit baffled by what the hon. Gentleman said about Bosnia, as I know of the distinguished work done by the British services in Bosnia on the appalling legacy of land mines there. I know because I was there and saw

British Army officers teaching local de-miners how best to go about their job. British forces in the stabilisation force in Sarajevo are part and parcel of a well-co-ordinated United Nations operation in the mining information centre in the SFOR headquarters. The British play a strong part in that co-ordination, and we shall continue to ensure that the maximum effort is devoted to making that country safe again.

Parachute Regiment

Mr. St. Aubyn: What assessment he has made of the current operational roles of the Parachute Regiment. [31411]

Dr. Reid: The operational roles of all elements of the Army are being looked at as part of the strategic defence review.

Mr. St. Aubyn: I thank the Minister for his reply, which was not as comprehensive as the leaks to the press over the weekend. Will he confirm that the identity, traditions and, above all, command structure of the Parachute Regiment will not be changed as a result of his Department's strategic defence review?

Dr. Reid: I am delighted to pay tribute to the glorious history of the Parachute Regiment and the contribution that it has made to the armed forces in a relatively short space of time.
I should not have to tell the hon. Gentleman not to believe everything that he reads in the newspapers. My answer may not have been as accurate or as long as the leaked report, but at least it was my own. The leak had nothing to do with any Labour Member of Parliament. Contrary to the ill-informed speculation in the leak, no one is talking about disbanding the Parachute Regiment or, for that matter, the Marines, but like all other elements of the ground forces, the land command and the wider forces, they are being subjected to scrutiny. The whole purpose of the foreign policy-led review is to ensure that we have a force configuration that relates to today's security analysis, not the past. We want to have useable, effective forces for the future, and even those which have had a glorious past may have to adapt owing to the new security situation.

Several hon. Members: rose—

Madam Speaker: Order. I call Mr. Brazier, who served in the Parachute Regiment.

Mr. Brazier: Thank you, Madam Speaker. Does the Minister agree that the special qualities and military skills of the Parachute Regiment and of its supporting airborne, engineer, artillery and logistic units go far beyond their means of delivery on to the battlefield and should be highlighted, not watered down, in the review? Does he also agree that the two Territorial Army Parachute Regiment battalions and other airborne and commando units are among the best and most flexible units in the TA?

Dr. Reid: Thank you for the background information, Madam Speaker.

Madam Speaker: My research is very good.

Dr. Reid: Yes, the hon. Gentleman is a fine big man.
The qualities, character and ethos of the Parachute Regiment are well known, and I have the highest regard for it. The hon. Gentleman ran through the capabilities of various units associated with the regiment, but he will not expect me to guarantee that nothing will ever change, for the Paras or for any other unit. However, I assure him that the qualities of the Paras are well known and appreciated, and that no one is talking about disbanding this famous regiment. We want to build on the abilities of our units to enhance their effectiveness in the face of new security threats and our response to them. The Parachute Regiment always played an honourable role, and it will do so in the new configuration.

Mr. Bob Russell: If newspaper reports prove correct and the Parachute Regiment, in a new form, moves to the garrison town of Colchester, where 24 Air Mobile Brigade is based, I can say that it will be given a warm welcome. Does the Minister agree that the traditions of the Parachute Regiment will continue, as did those of the cavalry regiments following mechanisation? I believe that there is a future for the Parachute Regiment, albeit in a different guise, and welcome the Minister's assurance that it will live on.

Dr. Reid: I thank the hon. Gentleman and note his comments. If those press reports are accurate, I must have spent the past eight months undertaking a different defence review from the one the newspapers have reported.

Defence Medical Services

Angela Smith: If he will make a statement on Defence Medical Services. [31412]

Dr. Reid: Defence Medical Services continues to carry out its duties with professionalism and dedication, both in peacetime and in support of operations. We are urgently addressing shortfalls in manpower and operational medical equipment in the context of the strategic defence review. We are also reviewing the future arrangements for secondary care.

Angela Smith: Does my hon. Friend agree that the state of Defence Medical Services is an indictment of the condition in which it was left by the Conservative Government? What steps are being taken to rectify equipment and personnel shortages?

Dr. Reid: We knew in opposition that there were problems with Defence Medical Services, and just before the general election, the Defence Committee highlighted its parlous state. Detailed scrutiny has revealed that we had not realised how bad things were. There are severe manpower shortages and such a lack of proper investment that we could not properly support a single operational brigade without implementing wider measures such as the use of reserves.
I shall not pretend that there are no difficulties, but the matter is a priority in the strategic defence review: the shortages constitute one of the potholes that we will have to fill before we enhance other capabilities. I have commissioned an urgent review of secondary care in the United Kingdom, and am treating the matter seriously.

Mr. Wilkinson: The Minister's statement that steps will be taken to improve the capability of Defence

Medical Services is welcome, not least because it shows that the Government are responsive to Select Committee recommendations. Will he improve the quality of Defence Medical Services by taking three comprehensive steps: by providing an adequate career structure for medical officers in the three services; by increasing the number of defence medical units in general hospitals; and by augmenting the capacity and range of responsibilities of medical reservists of all three services?

Dr. Reid: The hon. Gentleman asks about the career structure. He will know that this year's settlement for dentists, for instance, was widely welcomed. We are considering the reintroduction of distinctions in the medical services that are comparable with what is outside. There is a range of instruments at our disposal, including, as he said, the wider and perhaps earlier use of the reserves in the Defence Medical Training Organisation.
All those matters are being seriously considered, but I should not like to lead the House to think that there are easy answers, first, because of the inherited position from which we start and, secondly, because of the changing nature of the health service and trusts, which are now much more competitive than before. Because of the reduction in armed forces personnel, it is difficult to keep a range of tasks that employ the expertise of the medical services.

Oral Answers to Questions — HOUSE OF COMMONS

The President of the Council was asked—

Human Rights Select Committee

Mr. Corbyn: If she will examine the case for establishing a human rights Select Committee. [31438]

The President of the Council and Leader of the House of Commons (Mrs. Ann Taylor): The White Paper "Rights Brought Home" said that the Government favoured the establishment of a new parliamentary Committee with functions relating to human rights. We intend to take into account what is said during the passage of the Human Rights Bill before deciding what form of parliamentary Committee to recommend to the House.

Mr. Corbyn: Is my right hon. Friend prepared to meet a group of hon. Members who take a particular interest in human rights issues to discuss how that Committee might be set up? Will she recognise that, as human rights are now at the forefront of the Government's foreign policy, it is quite difficult for the Foreign Affairs Committee to deal with human rights issues around the world as well as British foreign policy interests? Does she agree that we would be better off if we did what many other Parliaments do and had a separate, dedicated human rights committee that can take up and investigate human rights issues in the world and try to bring them to the attention of the British Parliament and, obviously, the Government?

Mrs. Taylor: I think that my hon. Friend anticipates some of the discussions that will take place in Committee on the Human Rights Bill. I am always available to meet hon. Members who wish to speak to me about these


issues, but we should judge the timing of any such meeting by what is said in Committee on the Human Rights Bill.

Mr. Simon Hughes: I thank the President of the Council for her answer to the hon. Member for Islington, North (Mr. Corbyn) and join in pursuing his request. Is she as convinced as I am that it would do a great service to the House and to Parliament if we were seen to use the best experiences of other Parliaments to set up a body, potentially involving Members from both Houses, to examine human rights matters in this country and abroad? If the right hon. Lady is willing to come to a view after the Human Rights Bill has left Committee, that would be hugely welcome and could lead to a long overdue reform of the processes of this place.

Mrs. Taylor: I said in my original reply that the White Paper states that we favour the establishment of a parliamentary Committee. However, we should not prejudge what form it might take or whether it might be a Joint Committee but should wait until the Human Rights Bill has left Committee. Those matters are all aspects of the discussion that we shall take into account, and, of course, we shall consult widely.

Private Members' Bills

Mr. Hanson: What proposals she has to review the procedure for consideration of private Members' Bills. [31439]

Mrs. Ann Taylor: I have no current plans to do so.

Mr. Hanson: In the interests of modernisation, which I know she shares, will my right hon. Friend consider the possibility of timetabling private Members' Bills so that all stages of Bills that have the overwhelming support of hon. Members, such as that promoted by my hon. Friend the Member for Worcester (Mr. Foster), have an opportunity to be considered and voted upon, and a small number of hon. Members do not have an opportunity to filibuster them out of existence?

Mrs. Taylor: I share my hon. Friend's deep disappointment at the antics of Conservative Members on Friday. He knows that the time that is available for private Members' Bills is established by the House. If the Government sought to change the rules, there would be a great deal of interest in the House. For example, if we changed the rules for one Bill, there would be legitimate arguments by the promoters and sponsors of others that they had been treated unfairly. In its first report, the Modernisation Committee said that it may wish to give attention to how private Members' Bills are treated.

Sir Teddy Taylor: As the Government have made it clear that hunting with hounds is not an issue that will be dealt with by public legislation, is it not an insult to democracy for them to make no time available for further consideration of the Wild Mammals (Hunting with Dogs) Bill, particularly bearing in mind that only one weekday is needed? Rather than engaging in political exchanges, does the right hon. Lady appreciate that hon. Members on both sides of the House who feel strongly about this issue

believe that they have been sold down the river, basically because assurances were given in writing by people who now serve as Ministers?

Mrs. Taylor: The hon. Gentleman should bear in mind that one day is still available for the Bill and that, if matters were as simple as he suggests, the Bill would make further progress this Friday. Ministers' assurances that there would be a free vote on the issue have been upheld—Labour Members have had a free vote—but there would be great problems in giving extra time at this stage and adverse consequences for the passage of the Government's business, which must take priority.

Mrs. Dunwoody: Will my right hon. Friend arrange a seminar for Back Benchers in which she can explain that Back Benchers' ability to hold up legislation or to progress it is one of their last remaining powers and that those who talk about timetabling Bills do Back Benchers, irrespective of their party and certainly of the rubbish that goes on, a great disservice? Under the guise of modernisation, Back Benchers have already lost the power to vote on a number of Back-Bench issues, and have gained in return Adjournment debates that give them no power.

Mrs. Taylor: The changes have helped many Back Benchers to have important Adjournment debates on Wednesday mornings, and that provision is widely appreciated by the House; but my hon. Friend is right to point out that private Members' Bills depend on the overall will of the House. It would be difficult to reach agreement that there should be the type of timetabling that has been suggested. If I were to organise a seminar on these matters, I would ensure that she was one of the speakers.

Mr. Hancock: I am sure that the President of the Council shares the view that a majority of hon. Members are disenchanted with what happened last Friday and that a majority of people in the country are disappointed with the way in which Tories and others behaved. Will she consider proposing that the House should sit on Tuesday and Thursday mornings to give the Wild Mammals (Hunting with Dogs) Bill a fair chance of succeeding in all aspects of its passage through the House and that that should set a precedent for other private Members' Bills that might be similarly affected by the bizarre behaviour of hon. Members who want to frustrate democratic processes in the House?

Mrs. Taylor: I am aware that there is considerable concern about the Bill both inside and outside the House. I was one of the people who stayed here last Friday to vote for the Bill and I shall do so again this Friday. As the hon. Gentleman appreciates, were the Government to seek to change the rules for one Bill, promoters and sponsors of other Bills would have legitimate objections. We have to deal with these matters fairly. As I have said, it is one of the topics to which the Modernisation Committee may wish to turn its attention in the not too distant future.

Parliamentary Year

Mr. Bradshaw: What proposals she has to reform the parliamentary year; and if she will make a statement. [31441]

Mrs. Ann Taylor: The Modernisation Committee will consider the matter shortly, now that it has completed its work on the two reports that were published this morning: one on conduct in the Chamber, including recommendations on short speeches, precedence for Privy Councillors and the use of top hats; the other on the carry-over of Bills. I commend both reports to the House.

Mr. Bradshaw: I am grateful to my right hon. Friend for that reply and I congratulate her on her reports. Am I right in thinking that, with Easter barely a month away, we still do not know if or when there will be an Easter recess, let alone a Whitsun or summer recess? Does she accept that many hon. Members would gladly settle for shorter recesses if they were more predictable, so that we could plan our lives?

Mrs. Taylor: I did indicate, in the first week the House sat in January, the likely dates of the Easter recess. My hon. Friend and other hon. Members will appreciate that, with the business ahead of us and the

fact that we sometimes have to wait for Committees to finish or for Bills to come back from the House of Lords, it is difficult to anticipate the details of business a long time in advance. However, we are now giving two weeks' notice of business wherever possible and an early indication—even if it is sometimes in general terms—of other major events and when recesses are likely to be.

Sir Patrick Cormack: I thank the right hon. Lady for the leadership she has given to the Select Committee on Modernisation of the House of Commons. Does she accept that the agreement on the carry over—and it has to be with agreement that Bills are carried over—will make it easier to define a parliamentary year? While I do not necessarily associate myself with everything the hon. Member for Exeter (Mr. Bradshaw) said, does the right hon. Lady accept that there would be a widespread welcome for a more structured parliamentary year?

Mrs. Taylor: I am grateful to the hon. Gentleman for his comments. It will be for the convenience of the House if we experiment with the carry-over procedure, and I believe that we will be able to make progress on that. The hon. Gentleman was right to say that, if we manage to use that procedure successfully, it may be possible to anticipate, with greater certainty, the likely pace of the parliamentary year and when the recesses might occur.

Points of Order

Mr. Nicholas Soames: On a point of order, Madam Speaker. My point arises from some articles in the press on Sunday, which speculated, clearly on an informed basis, that there would be changes to the mode and ceremonial of the state opening of Parliament and other matters relating to the House.
Do you agree, Madam Speaker, that it is for the House to make those decisions? As the champion and guardian of Back-Benchers' rights, will you ensure that no changes are made before they have received the most detailed scrutiny in the House?

Mr. Paul Flynn (Newport, West): Further to that point of order, Madam Speaker. Is it not right that we should be given the details of the full cost of the state opening of Parliament? They were denied to us in the last Parliament, but we know that police costs are at least £300,000 for the day—in addition to the disruption of traffic in London. Should we not consider having one state opening per Parliament, rather than one a year?

Madam Speaker: The hon. Gentleman's last point was not a point of order.
I want to deal with the original point of order from the hon. Member for Mid-Sussex (Mr. Soames). He should not indulge in newspaper speculation—I do not. Any changes of the nature suggested are a matter for the

House. I have not yet been asked my views on the matter, but I have very strong views and I am ready to give them as soon as I am asked.

Sir Patrick Cormack: Further to that point of order, Madam Speaker. While it is right and proper that you should have full opportunity to comment on any suggested changes, do you agree that the official Opposition and other parties should be consulted widely on any such matters?

Madam Speaker: As far as I am concerned, all Members and all parties should be invited to comment whenever there is any suggestion that major changes should be made.

Mr. Jeremy Corbyn: Further to that point of order, Madam Speaker.

Madam Speaker: Order. I have dealt with the matter.

Mr. Tam Dalyell: On a point of order, Madam Speaker. I make no complaint that question 38 was not reached, but have you by any chance received a request from the Foreign Office to make a statement clarifying the difference of opinion between, on the one hand, Mr. Kofi Annan, Russia, China and France, and on the other, the United States and, possibly, the British Government, on the authority that is needed for a military strike against Iraq?

Madam Speaker: I have had no such request. Of course, it is Foreign Office questions tomorrow. I do not know whether there is a question that covers the point that the hon. Gentleman is trying to make, but, if there is, he may try to catch my eye at that time.

Orders of the Day — National Minimum Wage Bill

As amended in the Standing Committee, considered.

New clause 1

VOLUNTARY WORKERS

'.—(1) A worker employed by a charity, a voluntary organisation, an associated fund-raising body or a statutory body does not qualify for the national minimum wage in respect of that employment if he receives, and under the terms of his employment (apart from this Act) is entitled to, —

(a) no monetary payments of any description, or no monetary payments except in respect of expenses—

(i) actually incurred in the performance of his duties; or
(ii) reasonably estimated as likely to be or to have been so incurred; and

(b) no benefits in kind of any description, or no benefits in kind other than the provision of some or all of his subsistence or of such accommodation as is reasonable in the circumstances of the employment.

(2) A person who would satisfy the conditions in subsection (1) above but for receiving monetary payments made solely for the purpose of providing him with means of subsistence shall be taken to satisfy those conditions if—

(a) he is employed to do the work in question as a result of arrangements made between a charity acting in pursuance of its charitable purposes and the body for which the work is done; and
(b) the work is done for a charity, a voluntary organisation, an associated fund-raising body or a statutory body.

(3) For the purposes of subsection (1)(b) above—

(a) any training (other than that which a person necessarily acquires in the course of doing his work) shall be taken to be a benefit in kind; but
(b) there shall be left out of account any training provided for the sole or main purpose of improving the worker's ability to perform the work which he has agreed to do.

(4) In this section—
associated fund-raising body" means a body of persons the profits of which are applied wholly for the purposes of a charity or voluntary organisation;
charity" means a body of persons, or the trustees of a trust, established for charitable purposes only;
receive", in relation to a monetary payment or a benefit in kind, means receive in respect of, or otherwise in connection with, the employment in question (whether or not under the terms of the employment);
statutory body" means a body established by or under an enactment (including an enactment comprised in Northern Ireland legislation);
subsistence" means such subsistence as is reasonable in the circumstances of the employment in question, and does not include accommodation;
voluntary organisation" means a body of persons, or the trustees of a trust, which is established only for charitable purposes (whether or not those purposes are charitable within the meaning of any rule of law), benevolent purposes or philanthropic purposes, but which is not a charity.'. — [Mr. Ian McCartney.]

Brought up, and read the First Time

The Minister of State, Department of Trade and Industry (Mr. Ian McCartney): I beg to move, That the clause be now read a Second time.

Madam Speaker: With this, it will be convenient to discuss the following: Amendment (a) to the proposed new clause, in subsection (1), leave out from 'he' to end of subsection (2)(b) and insert—

'(a) works less than 20 hours per week in that employment,
(b) receives remuneration and allowances (including the value of any benefits in kind except subsistence and accommodation which are reasonable having regard to the circumstances of the employment) which amount in aggregate to less than the equivalent of 10 times the hourly national minimum wage per week, and
(c) is not in receipt of any state benefits other than the state retirement pension.

(2) Any payments made in respect of mileage allowance within the limits prescribed by Inland Revenue from time to time in respect of the Fixed Profit Car Scheme shall be disregarded for the purpose of calculating remuneration under (1)(b) above.'.

Amendment (b) to the proposed new clause, in subsection (1)(a)(ii), after 'incurred' insert
'or
(iii) paid as mileage allowance within the limits prescribed by the Inland Revenue from time to time in respect of the Fixed Profit Car Scheme;'.
Government amendment No. 20.

Mr. McCartney: Today's debate is another milestone in establishing a national minimum wage and in tackling poverty across the United Kingdom. The debate follows a failed filibuster by the official Opposition in the Standing Committee, where we had occasionally to debate for 26 and a half hours to make some proper progress on the Bill. Today, we see on the Opposition Benches a bedraggled army of fat cats, former fat cats and wannabe fat cats, who—both today and in the early hours of tomorrow morning—will undoubtedly try to promote their low-pay and no-pay strategy. The truth is that the official Opposition have lost the argument in the country and in Committee, and that they will lose it on the Floor of the House.

Mr. Andrew Lansley: On a point of order, Madam Speaker. Is it in order for the Minister to refer to a filibuster in Standing Committee? That implies that some of the Standing Committee's debate was out of order. As a member of that Committee, I can say that at no point was the discussion substantially out of order.

Madam Speaker: I doubt very much whether there could have been a filibuster in Committee, as my Chairman in that Committee would not have allowed such a thing to happen.

Mr. McCartney: Madam Speaker, I did say that there was "a failed filibuster." The hon. Member for South Cambridgeshire (Mr. Lansley) would not in any circumstances have been able to hoodwink my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), who—with the hon. Member for Bournemouth, East (Mr. Atkinson)—brilliantly chaired the Committee. It was


a failed filibuster—the attempt was abysmal—which is why we are now considering the Bill's Report stage on the Floor of the House.

Mr. Tim Boswell: In the middle of the Minister's various bits of rhetoric, he mentioned those who have failed not only in a filibuster but in being fat cats. As I presume that, at some stage, he will get round to speaking to new clause 1, would he like now to concede that, on the Opposition Benches, he is addressing a former chairman of the all-party group on charities and the voluntary sector?

Mr. McCartney: The hon. Gentleman is a bit of a wounded soldier; but I have not yet started. I did not mention any names, but we will undoubtedly be able to determine from the speeches made in the debate who are the fat cats, the wannabe fat cats and the failed fat cats.

Mr. Philip Hammond: Who is fat?

Mr. McCartney: I am fat, but I am not a fat cat.

Mr. Barry Sheerman: Will my hon. Friend give way on that point of delay?

Mr. McCartney: I give way.

Mr. Sheerman: Everyone knows that the official Opposition are opposing the Bill tooth and claw. Will my hon. Friend confirm that there has already been delay in passing a measure which is hugely popular among the public? Will he tell the House by how much the Bill has been delayed by the official Opposition? Some hon. Members would like to know when, at the earliest opportunity, we can implement a minimum wage.

Mr. McCartney: I can reassure my hon. Friend that they have not delayed the Bill—they have failed to delay it. Furthermore, they will not be allowed to delay the Bill, because the Government regard its passage as an absolute policy priority. That is why we have so quickly brought the Bill back to the Floor of the House for its Report stage and Third Reading, after which it will proceed to the other place, and then—in double-quick time—on to the statute book. Its provisions will then be enjoyed by countless numbers of low-paid workers in the United Kingdom.
Government amendment No. 20 and new clause 1 would replace clause 42 on voluntary workers. I am pleased to say that the entire approach to the clause has been marked by a consensus both on our aims and on the means of achieving them. We want to ensure, first, that genuine volunteers—who give their time to good causes—are not caught up in the Bill's provisions. We want to ensure also that voluntary organisation staff members—all 485,000 of them—are entitled to the national minimum wage. I believe that there is a consensus on those aims, both within voluntary organisations and on both sides of the House.
When we discussed the volunteers issue in Committee, I made a commitment to re-examine clause 42, to ensure that it would work as we want it to. We have subsequently

had intensive discussions with voluntary organisations. I have discussed the position also with the hon. Members for Daventry (Mr. Boswell) and for Eastleigh (Mr. Chidgey). 1 am pleased to say that the voluntary organisations have said that they support our approach. I think that we have got the matter right, and that our proposals incorporate in the Bill the reality of volunteering.
Before explaining the main differences between new clause 1 and the original clause 42, I should emphasise how the new clause is designed to work and how the Bill relates to volunteers, thereby clearing up any lingering confusion on the matter. The main point is that the Bill will apply only to workers, and that none of its clauses will apply to volunteers. Our judgment is that the vast majority who do volunteering work of one sort or another will not be affected in any way by the Bill, because they are not workers. That is what we want to achieve.
We are conscious, however, that there is a grey area. The definition of "worker" in clause 52 is quite wide, although no wider than the definition used for the purposes of provisions on unauthorised deductions in the Employment Rights Act 1996, which originated in the Wages Act 1986. Because of that, some genuine volunteers—although, we think, only a small proportion—might work under arrangements that would amount to a worker's contract. It is precisely those people—the Bill calls them "voluntary workers"—who are included accidentally, and whom we want to exclude through the "exit" of clause 42.
Let me briefly explain the main effects of new clause 1, and how it differs from the original clause 42. The overall effect is to broaden slightly the definition of "voluntary worker" to reflect the reality of volunteering. Subsection (1) broadens the range of bodies for which a voluntary worker may work while still falling within the exemption from the national minimum wage. It will now include not only charities and voluntary organisations, as before, but any "associated fund-raising body"—that is, a body separate from a charity or voluntary organisation but whose profits go to that organisation, such as a body running a charity's shops—and any "statutory body". Therefore, volunteers who work for charity shops, schools and hospitals, as well as for charities and voluntary organisations, and who happen to be workers, will be exempted from the national minimum wage.
Broadly speaking, the range of bodies covers volunteering in the whole statutory sector, but it does not cover volunteering in non-charitable commercial enterprises. To include that would undermine the Bill, and would go against the principle that volunteering should be for social good rather than a form of cheap labour for commercial profit.
In Committee, some technical questions were asked about the drafting. I have no difficulty with that. Just in case a sharp-eyed but puzzled Member is present, let me take the opportunity to enlighten him or her about a particular technical point of detail in the new clause: the inclusion in subsection (1) of the words "apart from this Act". The purpose of that is to prevent the exclusion provisions in clause 42 from being negated by the worker's entitlement to the national minimum wage under clause 15.
Subsection (1)(a) maintains the provision in the original clause that a voluntary worker may receive, or be entitled to, expenses actually incurred, or
reasonably estimated as likely to be or to have been so incurred".
That ensures that voluntary workers can be paid travel or out-of-pocket expenses without becoming "workers" entitled to the national minimum wage.
Subsection (1)(b) adds a new provision extending what a "voluntary worker" may receive while still being regarded as a voluntary worker, beyond "expenses", to include reasonable "benefits in kind". That consists of "subsistence"—the direct provision of day-to-day sustenance, but not monetary payment—or accommodation. It would cover, for example, the position of voluntary workers employed in youth hostels.
Subsection (2) further extends what a "voluntary worker" may receive to include a monetary payment of subsistence, but only in particular, narrowly defined circumstances. First, the voluntary worker must be employed by a "host" employer, having been placed there by a charity. Secondly, the host employer must be a charity, a voluntary organisation, an associated fund-raising body, such as a charity shop, or a statutory body such as a school or a hospital.
The provision is intended to cater for the position of organisations such as Community Service Volunteers—CSV—which place volunteers, often away from home, with schools, hospitals or voluntary organisations. Such volunteers receive a subsistence allowance to cover laundry expenses, toiletries and other basic day-to-day needs. The circumstances in which a subsistence payment is allowed, without generating an entitlement to the national minimum wage, are deliberately drawn narrowly to minimise the scope for evasion by employers claiming that they were paying their "volunteers" a subsistence allowance.
Subsection (3) extends what a "voluntary worker" may receive without generating an entitlement to the national minimum wage to include training, as long as that training is geared to the activity in which the voluntary worker is engaged. It would include, for example, first aid training for voluntary workers who care for old people or work with children. The provision is included to reflect the fact that voluntary workers often receive training, which may be regarded as generating a contractual arrangement.
Finally, subsection (4) contains definitions of terms used in new clause 1. Amendment No. 20 would delete the existing clause 42, which new clause 1 replaces.
I hope that, following the Government's open and consultative approach on the matter and the constructive input from voluntary organisations and hon. Members on both sides, the House will readily accept the Government amendments. They are good for volunteers, good for the Bill and entirely in line with the Government's approach to the national minimum wage. We have received a letter from the voluntary organisations accepting the amendments, which they believe meet their concerns and needs. I hope that the House will agree to them.

Mr. Boswell: I sometimes feel that the Minister of State feels better once his press release is out of the way. If he has got it out of the way now, rather than delivering it on Third Reading, perhaps we can get back to today's

business. Having been uncharitable about us in a way that was less worthy and convincing than usual, he then proceeded to deliver a new clause which included a measure of consensus. I would not advise my hon. Friends to contest the new clause and the associated Government amendment. No doubt they will wish to speak to their own amendments, and I shall embrace in my remarks some of the concerns on which they touch.
I thank the Minister for trying to bring forward a measure of consensus and for recognising the best traditions of the House in the commitment of hon. Members on both sides to the charitable and voluntary sector for which we feel a great deal of affection. However, in doing so, he managed to deny the argument in his quasi-press release.
If, as the Minister commented, there was a failed filibuster in Committee, he conceded almost in the same breath that the concerns that were expressed by my hon. Friends and me were essentially technical. In respect of the highly legal and complex matters involved—as I mentioned to the House, I had some involvement in charity law, although I hasten to say that it was as a lay person—it is essential that we get it right. Whatever purposes the Government have, we must ensure that they are not frustrated by some technical error.
Turning to the new clause, I should like to draw to the attention of the House a certain distinction. Although it is not a precise one, it is important that we should have at least the thrust of the argument in mind. There are what might loosely be called, to use a slightly Irish phrase, professional charities and amateur charities. The former are large, well-organised charities that employ staff, human resource directors, lawyers and others to advise them and are not represented by, but, in a sense, are reflected by, the National Council for Voluntary Organisations, with which I have had a constructive relationship on this Bill and others. In a way, they are not the problem, although they are the subject of the new clause.
Problems are much more likely to arise in respect of what might be called the amateur sector—although they are not amateurish—which comprises smaller charitable organisations that do not have full-time salaried staff, probably cannot afford access to the best legal advice, may go the Charity Commission from time to time and may be members of the NCVO, but are less closed with their definitions because their concern—goodness knows, it is the concern of us all—is to get on with the job of helping people through the various heads of charity.
That distinction is relevant to several aspects of the Bill that we shall consider. The big organisations that are professionally advised and have made an input to the Government will be able to steer around—or perhaps through—the new clause. They will manage. I am concerned about how the less sophisticated organisations that are less directed towards the day-to-day business of compliance with legislation will manage.
The Minister rightly said that there is no reason in principle why workers employed by a charity should not have the same right as others to receive the national minimum wage. He accurately quoted the NCVO's estimate of 485,000 people employed by charities. That is a significant number of employees. I am not suggesting that we should make an exception for them. In Committee, the Minister introduced a radical exemption


for the armed forces, affecting fewer people than half the number in the charitable sector. We have already had that argument.

Mr. Ian McCartney: The armed forces are covered by the armed forces pay review body. That is an entirely different issue from volunteers.

Mr. Boswell: It has been a sadly prevalent practice of Governments of both colours for several years that the recommendations of the various review bodies are not always implemented immediately and in full. That could give rise to different treatment. However, that is the subject of a later amendment.

Mr. Hammond: Would my hon. Friend care to question the Minister on whether he would like to exclude nurses because they have a pay review body?

Mr. Boswell: I note my hon. Friend's suggestion, but I shall not be tempted at the moment.
I am not arguing that it is wrong for the salaried, professional—if I may use the word—employees of charities, many of whom are professional people, not to be able to enjoy the benefit of the national minimum wage.
The second category is volunteers who help charities. The Minister is nodding. He sees the clear distinction. I kick myself because only afterwards did I remember that probably the best example that we could have brought forward in Committee was the Low Pay Commission. The Minister's press release says that its members have undertaken to serve without remuneration. They are entitled to do that. I have not probed the point with the Minister, but I hope that they are receiving appropriate subsistence and expenses and do not have to pay their hotel bills wherever they go. Before the Minister says that I have it wrong, I wish to acknowledge the work of the Low Pay Commission—done on a voluntary basis.
Many people volunteer. I think that the NCVO's figure is about 3 million people. That is different from being paid to work for a charity. The Minister will know from our debates in Committee that the problem arises in between.
The Minister, who is nothing if not a practical man when he is in the mood, keeps saying that it is a matter of common sense to know whether a person is paid. However, on this issue as on others, the Government have found it difficult to ram the protean reality and constant complexity outside this place, which is well exemplified by the charity sector, into the mould that they have set for the national minimum wage, with a series of entitlements and criteria. If that mould does not fit, charities and the people who work for them have two choices. They can either change their arrangements or turn a blind eye to the legislation. One will probably end in tears, and the other will certainly result in difficulty. In the context of the new clause, it is difficult to make an absolute distinction between those who are volunteers and those who are not.
I know that there is a wish—it is a strong doctrine, certainly in professional parts of the charitable sector— that people should be remunerated on a professional basis for their professional services for charity and should, as it were, keep their charity for whatever else they choose to

do. I understand that argument; it is certainly easier to sustain with a larger organisation than it is with a small one.
Some years ago, I made inquiries of a well-known charity about its terms and conditions of employment because I was thinking of applying for a job. I did not, in the event, pursue it—not because of the answer that I was given, I hasten to say. The charity suggested that its going rate was somewhat below the traditional going rate. I think that a figure of 25 per cent. was mentioned. That was at the beginning of my career. Such a rate is not by any means characteristic of all charities, although it is not unknown, even in larger charities.
The difficulty with which my hon. Friends and I have been wrestling in Committee is that some people would perfectly like to be associated with a charity on a professional basis. Indeed, the charity might benefit from that and welcome the professional status of workers who do not necessarily want to draw a full salary. Again, no doubt there might be ways of getting round the problem. It might be possible for citizens advice bureaux, for example—I heard this recently, and I think that the Minister did, too—to have a split contract. A body could have a charitable contract for, say, two days of the week, and a paid-for contract for three days. One's remuneration could be concentrated in such a way as to take it over the level of a national minimum wage. None the less, that would be a hassle and not always reflect reality. The Opposition therefore retain that concern.
I turn to the question of honoraria. The Minister seems to think that people who receive honoraria are not workers. I am pleased to hear that, in his terms, they are not. The nature of honoraria is such that they are paid probably on an eclectic basis and after the event. I envisage a situation in which a lady has looked after the village hall for years, probably paid for the stamps and written the letters. Suddenly, somebody says, "Good Lord, Mrs. X—or Miss Y—hasn't had any money for years! We have had a slightly better year than we thought and we want to send her a cheque or a bunch of flowers."
Such a situation would not normally be pursued by the tax authorities, and I particularly want it not to be pursued in the context of a national minimum wage, because it is a reality, certainly in the smaller charity sector. Not only money or principle comes into play. If it were necessary to compute the number of hours worked by that person and in what circumstances, it would be almost impossible. We may well—this may be the Minister's answer—have to turn Nelson's eye to such situations. We do not want to pursue such people, and I doubt very much whether they would want to assert their ultimate rights under the national minimum wage. Such situations are an uncomfortable irritant—even under the new clause.

Mr. Lansley: Does my hon. Friend recognise that disagreements among such persons—although they may be volunteering happily to work for the kind of village hall committee that he describes—may lead to one disgruntled former volunteer asserting that they were, in fact, employed and a worker for the purposes of the Bill?

Mr. Boswell: My hon. Friend is right to cite such a hard-line case. In such unpleasant circumstances, a decent and informal relationship breaks down into two camps—the Big-endians and Little-endians on the village hall committee—at which the book will be thrown. There may be difficulties.
My other concerns relate to the definition of allowable expenses. My hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) has tabled amendment (a) to the new clause to rehearse that. I share some of his unease about whether the criterion is sufficiently generous to meet the realities of the charitable sector.
There is also a question about the definitions of "associated fund-raising body" and "statutory body". The Minister covered that subject at some speed. I do not complain about that, but, as I understood it, he said that an "associated fund-raising body" would be, as it were, a fund-raising body attached to, but not part of, the charity, and that it would not be a charity shop, because if a person went to work for a charity shop as a volunteer for nothing, that was down to them, but if a person did take a salary or a wage, it would have to be at the national minimum wage because, otherwise, by implication, it would be out of line with the practice in other parts of the retail sector.

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Mr. Ian McCartney: The position is clear, is it not? We have tabled new clause 1, which clearly says that people who work for charity shops as volunteers will not fall under the terms of the Bill; but where a charity provides a full-time worker to manage a shop or a range of shops as part of their duties, they are clearly a worker and would be covered by the Bill. I believe that the amendment makes a clear and helpful distinction.

Mr. Boswell: That is clearer, and I am grateful to the Minister for that. The other question—

Mr. John Bercow: The Minister has just offered us a cast iron distinction, which may well be applicable in most cases, but does my hon. Friend accept that it may not apply in certain cases? Are there not instances in which a person works in a charity shop, not for an honorarium but for a modest but regular payment that is below the national minimum wage, and in which, if the shop were obliged to pay that person the national minimum wage, it would have to cease to employ that person? Would not that be a most undesirable state of affairs?

Mr. Boswell: That is the substance of our concern.

Mr. Ian McCartney: indicated dissent.

Mr. Boswell: The Minister of State shakes his head, but I am sure that such cases will arise, and I am sure that such shops will fold, because, in some cases, they are at the margins of profitability, and they will no longer be able to do their service for the charity. We are worried about that.

Mr. McCartney: I am sorry to interrupt again, but, at the end of our discussions with the hon. Member for Eastleigh (Mr. Chidgey), the hon. Member for Daventry (Mr. Boswell) broadly agreed that the concept of the new clause met the objectives that we all wanted to achieve. The hon. Member for Buckingham (Mr. Bercow) said, in his short contribution, that that was not the case, and the hon. Member for Daventry has just agreed with him. If he agreed with me and the hon. Member for Eastleigh in my office, has he changed his mind since?

Mr. Boswell: I did make it clear to the hon. Gentleman—I do not renege on that—that I agreed that

the new clause was a substantial improvement and met most of our objections. I said, however, that we had continuing anxieties in relation to minor payments—we may call them honoraria or whatever—about which I have spoken, and about the fact that persons might choose, or continue to choose, to work at what might be termed "non-fully national minimum wage rates". They will have to find a way of doing so.
The Minister has taken a firm view, as he is entitled to, saying that there will be no exceptions when persons are employed. I understand that. If that is the case, such people will have to find a device, either by the on-off, "switch the light bulb on" type of payment, which I have described, or by some type of covenanting back, if the Inland Revenue will allow it.

Mr. Bercow: I do not wish to delay my hon. Friend for a moment longer than is necessary, but will he accept—for the avoidance of doubt—that the situation that I described is not hypothetical, but relates to a constituent who has raised that point with me, and first did so several months ago?

Mr. Boswell: My hon. Friend is right. I recall that he mentioned his constituent in Committee.

Mr. McCartney: His mother.

Mr. Boswell: It was not his mother, as I recall, although the Minister of State is, as ever, trying to be helpful. In effect, we are trying to set out the sort of advice that we will have to give my hon. Friend's constituent.
The difficulty, particularly when dealing with sensitive areas such as charities, is that people do not want their generosity to be trespassed on, and will say, "If it's got to be done like that, I've never had a covenant with anyone." Or they will say that they will not work two days on one basis and one day on another, when that is not how they see their job. They will end up crashing out of employment. That is our wider concern with other parts of the Bill, and we certainly have that concern over this aspect of it, although that is in no sense to resile from the improvement that the Minister has made in the new clause. That is why I have invited my hon. Friends not to oppose it.

Mr. Lansley: Before my hon. Friend concludes on that point, did he observe that the Government asked the Low Pay Commission to consider the point at which an honorarium shades into a wage? Clearly, the Government have not received advice on that matter. Would it not have been advisable for Ministers to wait until they had such advice?

Mr. Boswell: My hon. Friend performs a service in reminding me that that is exactly what the Government did, and I endorse his advice. Later, I shall say that the whole business is back to front—it would have been better to set up the Low Pay Commission, await its advice and then debate its conclusions, not the other way round. No doubt, the commission will produce something and, in a modest way, our discussions will help to inform that.
Finally, on the overall impact of national minimum wage legislation on the charitable sector, the Minister has not sought to deny that there might be some such


impact—as my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) said, it was implicit in the Government's advice to the Low Pay Commission. Indeed, I suspect that the Minister would want to make a virtue of that in relation to persons employed in that sector.
Before he takes that wrongly, I am not arguing that the Opposition should object on principle to those extra costs. They will fall and they will be substantial. At one stage, I was minded—I resisted the temptation—to table an amendment asking for a deferment for charities and the voluntary sector. However, I understand that the Minister wants to have his Bill at one go, and we will not resist that. In turn, he needs to acknowledge that there will be some impact effects.
Again, I must quote the National Council for Voluntary Organisations, which has assessed the problem and suggested that, if the national minimum wage is set at £4.50 an hour, the sector is likely to require an additional £165.6 million to meet the increased salary bill.

Mr. Ivan Lewis: As someone who has worked in the voluntary sector all my life and served on management committees, I find the hon. Gentleman's attitude towards the sector patronising. People who run and work for voluntary organisations and who really care about the voluntary sector strongly believe that we ought to encourage good practice. Part of that is paying properly people who work for voluntary organisations, thus ensuring that the people who depend on their services get the appropriate quality care.
Does the hon. Gentleman agree that people who care about the charitable sector should encourage good practice and have faith in the people who run voluntary organisations to understand the difference between those who are paid and those who are voluntary, and to stop pretending that those paid people are not capable of making such a distinction? The people who run voluntary organisations and who want them to provide the highest quality of care and introduce good practice in terms of employment law will welcome the national minimum wage.

Mr. Boswell: I shall reply briefly to that rather long intervention. First, we certainly accept that the charitable sector should have highly professional standards. I have told the House why it might be more difficult for the smaller and what I will in shorthand call the less professional charities. Secondly, I have not sought to resile from the principle of the national minimum wage that the Government are producing as regards the voluntary sector. Thirdly, I have just told the House that, on reflection, I decided not to table a dilatory amendment for the charitable sector. I was about to say that there would be some acknowledged costs.
I cited the figures from the NCVO research of £165 million if the rate is set at £4.50 an hour, and £87 million if it is set at £4 an hour—I round down the figures. If the rate is set at £.50, the cost would be an extra £41.8 million. There will also be additional costs involving the public sector, which is the subject of a later debate.
The NCVO also says that there will be a differential effect on the smaller organisations—those with annual incomes between £10,000 and £100,000 will face costs

amounting to almost 5 per cent. of their current expenditure on staff. For larger organisations, the cost of a £4 rate would represent some 2.5 per cent. of current expenditure.
The question will arise—I do not want to go on about it now—how the voluntary organisations will seek to recover those costs. Will they receive money from local authorities? What will happen in relation to Government Departments?

Mr. Lansley: Before my hon. Friend leaves that point, will he acknowledge that the costs that voluntary organisations and charities may face could, to some extent, be offset by job substitution between paid, professional employees and volunteers? That could have deleterious effects for the charities—along the lines suggested by the hon. Member for Bury, South (Mr. Lewis—by diluting professional input.

Mr. Boswell: I think that it is self-evident—my hon. Friend performs a service in saying it-that if there is choice between two kinds of employment—one paid for, and the other not—and the costs of the paid-for employment are artificially raised by the operation of a national minimum wage, the balance between the two kinds of employment will be affected.
There will be a real impact on some of the larger charities. The Royal National Institute for Deaf People, which carried out some very helpful work in its submission to the Low Pay Commission, referred to the substantial impact on certain similar voluntary organisations. The costs will have to be met from somewhere, especially in cases where charities have entered a contract to provide services to a local authority or Government Department, for example.
Although most of those contracts are probably renegotiated annually, in relation to wages, one or two will have a longer tail—they will be in force for three or even five years—and the whole economics of the business will be upset by the introduction of the national minimum wage. If Government are not prepared to meet those obligations one way or another, the charitable sector will deliver less care.
Although we welcome the new clause, which provides a better definition than was available before, it leaves us uncomfortable on some points, which will require some kind of accommodation. I hope that the Minister will respond to some of the matters that I have raised and those that will be raised by my hon. Friends. The Bill will have a significant impact on the voluntary sector. The costs that will be incurred will need to be funded sooner or later by someone other than the charitable sector itself if the quantum and quality of care are not to be diminished.

Angela Smith: I welcome new clause 1, as it recognises the special nature of charities, voluntary organisations and the voluntary sector generally. As a former employee in the voluntary sector, a former volunteer and an officer of the all-party group, I take a special interest in the subject. The House should note that the umbrella organisations of the voluntary sector have never argued for their workers to be exempted from the minimum wage. As new clause 1 acknowledges, however, they have asked for a recognition of the special role of volunteers. The new clause recognises that volunteers receive, first, expenses and sustenance, and, secondly, training.
On Saturday evening, I attended a fund-raising event for St. Luke's hospice in my constituency. The number of volunteers who were present was incredible—people who freely give up their time, effort and energy and make a great commitment. Some of them were not only volunteers at St. Luke's hospice, but serial volunteers. At many events in my constituency—I am sure that other hon. Members have similar experiences—I meet the same people who volunteer to help others day in, day out.
If people give their time, energy and commitment, it is right that they should receive expenses if they wish. Many choose to take no reward for their activities, but the difference between expenses and remuneration— wages—should be recognised.
The new clause recognises the situation of those in training. I recently attended an event organised by the south-east Essex office of Relate. As the former Marriage Guidance Council, Relate has to ensure that its volunteers undergo proper training. Despite some of the comments of Conservative Members, being a volunteer does not mean being unprofessional or unqualified.
Volunteers have many skills and are often extremely professional. They should not be taken any less seriously because of their volunteer status. The people whom they seek to help and support have to be assured that they are being counselled or helped by someone who is fully trained.
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Amendments (a) and (b) are misguided and designed to avoid the minimum wage by the back door. It is wrong to suggest that someone who works fewer than 20 hours should be exempt. Those who do part-time work should receive the minimum wage, as should those involved in job sharing.

Mr. Bercow: The hon. Lady is making a general point, but will she consider the specific example of someone who works 15 hours a week for a charity shop, for a consideration of £2.50 an hour, thereby earning £37.50 a week? If the charity shop were obliged to pay the national minimum wage, at £3.50, £3.60 or £3.75 an hour, it would not be able to afford that person's services.

Angela Smith: The first thing I would say is something that we heard often in Committee: I blame myself for taking that intervention. Conservative Members clearly do not understand the difference between those who give their time, effort and energy and ask for recognition but not remuneration, and those who should be paid the minimum wage.

Mr. Bercow: Answer the point.

Angela Smith: I have answered it.
Amendment (b) represents another attempt to avoid the minimum wage by the back door. It would make it difficult to give appropriate training for volunteers.

Mr. Lansley: Will the hon. Lady give way?

Angela Smith: I have already given way once, and I want to make progress.

Mr. Bercow: Very wise.

Angela Smith: I am certainly wise not to take silly interventions from Conservative Members.
The new clause draws a careful distinction between those who should be treated as volunteers and not caught up in the minimum wage and those who are employed and should receive the minimum wage. I remind hon. Members of the views of voluntary bodies. The voluntary sector does not want exemptions that would allow it to avoid paying its staff the minimum wage, and Conservative Members should not try to foist those exemptions on the sector.

Mr. David Chidgey: The Minister opened the debate in his usual, perhaps almost charming, but certainly endearing and robust fashion.

Mr. Bercow: Rumbustious.

Mr. Chidgey: That is an even better word. We have become used to the Minister's style in the weeks, if not months, during which we have been locked together in Committee. I hope that the lasting impression does not prove too painful for his future career or his peace of mind. I do not want to be accused of filibustering, so I shall come to the point.
We welcome the new clause. The Bill as it stood would not have excluded millions of volunteers—in the public sector, in hospitals and schools, or working for charitable organisations-from the minimum wage. It would not have excluded volunteers who receive benefits in kind—expenses for meals, travel, accommodation, and health and hygiene when they are away from home, for example—that are essential to enable them to continue volunteering.
It is important that that issue be addressed. Both sides of the House accept that it is essential that volunteers should be able to perform the services they offer in the voluntary sector. It is also generally accepted that volunteers should never be used as a substitute for paid staff; that issue has been addressed in our discussions both inside and outside the House.
Volunteers add value. They make a valuable, indeed crucial, contribution to the level and quality of service that voluntary organisations, as well as some public sector organisations, provide in our communities. Many examples could be cited, and I listened with interest to the comments of the hon. Member for Basildon (Angela Smith). I am sure that all Members of Parliament work closely with their local charitable organisations. We could all talk at great length about the valuable services they provide, and how important it is for us to support them.
New clause 1 contains a number of issues that are worthy of further discussion, and I hope that we will learn a little more about the Minister's proposals in the course of our debate. In particular, I wish to address the issue of training provided to volunteers while they provide voluntary services. That is a grey area.

Mr. Lansley: On the question of training, does the hon. Gentleman agree that new clause 1 makes a spurious distinction between training that is specific to the work undertaken by a volunteer and training that is generic? It might be better for volunteers in the charitable sector if all training, specific or generic, were left out of account, so that they could benefit from training more generally.

Mr. Chidgey: The hon. Gentleman has a habit of second-guessing my remarks before I can make them.


He raises an important point. As new clause 1 stands, it refers to limiting training to that required to perform the volunteer's duties. It is difficult to be so precise in that distinction. I am anxious that the new clause should not deprive volunteers of training in basic social skills, including numeracy and literacy, that might enable them to enter the job market and gain employment or undertake further training and education.
As I have mentioned to the Minister on an earlier occasion, the Prince's Trust has a fine record in training. People who have previously escaped the net of employment have found fulfilment in paid employment or further training after they have finished a project with the Prince's Trust. I am anxious that nothing in the new clause would preclude volunteers who work with the Prince's Trust from receiving that basic training in additional skills to enable them to achieve further fulfilment in their lives.

Mr. Ian McCartney: I can give the hon. Gentleman the reassurance he seeks, and I can go further. The Bill contains enabling clauses to deal with training issues, which the Low Pay Commission has been asked to consider and report on. It is worth while for the hon. Gentleman to raise those issues, but the Government have gone to great lengths to ensure that they are all addressed.

Mr. Chidgey: I am grateful to the Minister for that reassurance, but he will understand that it is difficult for Opposition Members to be sure of the Government's intentions, because we have been told so often that the Low Pay Commission will address the issue, but we are still waiting for it to report on so many issues. I am sure that the Government's intentions are honourable, but it is difficult for Opposition Members to be sure what will happen when we do not have the necessary information before us.
At the beginning of the debate, the Minister mentioned the status of limited companies that are set up as an adjunct to a recognised charity. Many of the national charities—including Oxfam and Age Concern—have limited companies that act independently as separate, commercial enterprises with the sole objective of raising money for the charity concerned.
I hope that the Minister can assure me that, under the new clause, the distinction between workers for the charity, workers for the enterprise and volunteers for both will be clear. That is important, because I agree with him that people who should be paid a wage must not be denied one because they are classified as volunteers.
The hon. Member for Daventry (Mr. Boswell) touched on a category that is better entitled "dual-capacity workers". Such people work some hours as volunteers and some as paid staff. There must be a clear distinction in the Bill between volunteering and employment. Such people should have employment contracts for the hours they agree to work with their employers as paid members of staff, but should also have volunteering agreements for the additional time that they wish to give voluntarily to the charitable organisation.
Examples come readily to mind. A scout leader may work some time for the Scout Association as a paid member of staff but readily volunteer his time at evenings or weekends as a scout troop leader—a clear distinction between volunteering and paid employment.

Mr. Boswell: The hon. Gentleman is making a good case. Does he accept that his suggestion of a contract for working and an agreement for voluntary work is probably, on my reading of the new clause, the only way forward for people in that situation?

Mr. Chidgey: I thank the hon. Gentleman for that intervention. That is precisely the point, and I look forward to the Minister clarifying it.
Hon. Members have also mentioned people who are semi-retired. I shall refer to such people as semi-retired, although there are other descriptions, such as "prematurely redundant", or that they have been given an opportunity to seek other employment—sacked, in other words. Many people, at a fit and robust age, earlier than they expected to retire, are able to contribute to society, but find that their remuneration through pension or redundancy is not enough to live on.

Angela Smith: Like Tory Ministers and MPs.

Mr. Chidgey: I shall refrain from responding to that remark. Hon. Members all start as volunteers. There is always a queue of people volunteering to take our jobs come general elections. I suppose that we are paid volunteers in that regard.
Many robust, fit people with much to offer society are not in full-time employment and have income from pension or redundancy payments that is not enough for them to live on comfortably. They want to be able to work for the voluntary sector but also need some remuneration.
It is for such people that contracts of employment and agreements for volunteering are so important. If they wish to work a number of hours per week at not less than the minimum wage to earn sufficient for their needs, we must distinguish between paid hours under working contracts and additional hours that people may wish to volunteer for under volunteering agreements. There is always a danger of coercion with such agreements. I should like some comfort from the Minister that the new clause will ensure that volunteer hours are a genuine gift of the time, not the result of coercion to work extra hours for what would be less than the national minimum wage.
It was an oversight that the Bill did not adequately address the treatment of volunteers. I am grateful to the Minister for the way in which he recognised that, and for how the Government have listened to the Opposition's arguments. As a result, the new clause goes a considerable way to allaying the concerns of the Opposition and of many people in the voluntary sector about the treatment of volunteers. We welcome the Bill and will support it, but I look forward to the Minister clarifying my concerns.

Mr. Hammond: As the Minister said, Conservative Members have opposed the principle of the Bill, but I hope that he recognises that, in Committee, we engaged constructively in seeking to improve the Bill and in identifying some of the areas of weakness within it. He accused the Opposition of having mounted a failed


attack with a filibuster: in fact, we had a long, but extremely constructive and important, discussion, and one of the results is that we have three Government new clauses and 35 Government amendments on Report. I hope that the Minister has the good grace to recognise that the Committee discussion has given him an opportunity to deal with many issues.

Mr. Ian McCartney: I have to put it on record that most of the Government amendments are clarifications relating to other legislation passing through the House. There are few or no amendments of major substance, and, where such amendments have been tabled, that is down to the Government seeking to improve the Bill from our own perspective.

Mr. Hammond: There we have it: the Government were not informed or illuminated at all by the debate in Committee, and all their new clauses and amendments would have been tabled anyway.

Mr. Bercow: Notwithstanding the Minister's intervention, will my hon. Friend confirm that, to his knowledge and from his recollection, not a single Labour Back Bencher sought to introduce a new clause or an amendment to an existing clause? All the pressure came from Opposition Members, which is testimony to the effectiveness of their contribution to the debate.

Mr. Hammond: I thank my hon. Friend for that intervention. I believe that he is correct, but I am pleased to note that that reticence has now evaporated, and that we are to consider later an amendment tabled by Government Back Benchers.
Notwithstanding the Minister's remarks, new clause 1 is the result of a constructive discussion held in Committee, and, as he said, the issue with which it deals commanded a real consensus on both sides of the Committee. The Minister has recognised the issue of voluntary workers and the special needs of the voluntary sector; however, his new clause does not deal with all the issues raised in Committee. In the opening sitting, the Minister said that there was no point in having a Standing Committee if it was simply going to be
a dialogue of the deaf."—[Official Report, Standing Committee D, 13 January 1998; c. 22.]
His response in the form of new clause 1 suggests that, if not a dialogue of the deaf, our Committee was perhaps a dialogue of the hard of hearing.
I am pleased to see that the Minister has dealt with the issue of subsistence. I raised that in relation the Youth Hostels Association and the problem of subsistence for those working for voluntary organisations. If included in the remuneration that they are considered to receive, it could result in their moving from being volunteers to being paid workers. The Government are clinging to the dogma of universality by insisting that there are only two possible categories of person working for a voluntary organisation: pure volunteers and people who are fully

employed by that voluntary organisation. Common sense suggests that that is not the case, and that there are people who fall between those two categories.

Mr. Bercow: My hon. Friend and I have discussed this matter at length and on several occasions. Will he confirm that a number of individuals who straddle the divide to which he has referred work in his constituency?

Mr. Hammond: My hon. Friend is absolutely right. In Standing Committee, he and others of my hon. Friends were able to point to specific examples from within their own constituencies. Later in my speech, I hope to be able to deal with a specific example in my constituency and to ask the Minister to consider a case that I fear would be adversely affected, notwithstanding the fact that the drafting of new clause 1, which deals with voluntary workers, has been very much improved.
Someone who is in the fortunate position referred to by the hon. Member for Eastleigh (Mr. Chidgey) —perhaps in receipt of a pension and prematurely retired, with a little time available—may wish to help a voluntary organisation, but he may be unable to give his time entirely freely. There is a continuum between the pure volunteer, who works without any consideration, and the fully employed worker, whose primary motivation in working for an organisation is the remuneration that he receives. I had hoped that, in the time between Committee and today's debate, the Minister would address that issue as he considered the treatment of voluntary workers.

Mr. Andrew Rowe: There has been quite a lot of talk about being prematurely retired. One of the points we need to remember when talking about volunteering and volunteer organisations is that many people who retire at a perfectly reasonable time may well have 25 or 30 years of active life still ahead of them—and during some parts of that time, a small remuneration is often useful.

Mr. Hammond: I thank my hon. Friend for his contribution. A significant and growing number of people who may be able to contribute to a worthwhile cause, not just for a couple of years, but on a fairly long-term basis, would be prepared to do so for a wage or remuneration far below what they would be prepared to accept if they were working for a commercial organisation.
There may be a blend of motives between the desire to earn money and the desire to do worthwhile work for a worthwhile organisation. My hon. Friend the Member for Daventry (Mr. Boswell) and the hon. Member for Eastleigh have suggested that one solution would be for people in such positions to work part of their time as a volunteer, for nothing, and part as a paid worker. Such an artificial arrangement smacks of avoidance, and hardly brings the legislation into better standing. It would be far better were the Government to recognise explicitly that there may be a blend of motives between pure altruism and the desire to earn money, and to deal with that in a way that does not cause artificial avoidance.

Mr. Boswell: Does not my hon. Friend consider that clause 39, which involves the extension of the Act, under regulations, to certain other categories of workers—


or persons who are treated as if they were workers—poses potential difficulties, even in relation to the suggestion that I put to the House?

Mr. Hammond: My hon. Friend is exactly right. A number of difficulties and potential pitfalls, not least relating to taxation and national insurance, might arise were people tempted to arrange their affairs in a strictly artificial way to deal with the absurd notion that the Government will not allow someone to have a mixed motive in seeking employment or work with a charity. They will not allow the halfway house.
Many decent, respectable people who are willing and anxious to make a contribution to the society in which they live, but who cannot, for one reason or another, afford to give their time totally freely, would be greatly offended by the measure as it now stands. It would be a gross infringement of their liberty and their right to provide good work in society in a way that is practical and convenient for them.

Mr. Lansley: I am listening carefully to my hon. Friend, and I realise that the difficulties proliferate. The new clause refers to statutory bodies. I know from my experience that honoraria paid to members of national health service trust boards are unlikely to correspond to the national minimum wage rate because of the number of hours they work. How does the new clause exclude such people from the definition of "worker"?

Mr. Hammond: I shall discuss later the jeopardy in which people will be placed if any sum they receive is considered to be remuneration under the Bill. The results would be dramatic: any money other than subsistence payments and reimbursement of expenses would be subject to the national minimum wage provisions.

Mr. Ian Stewart: Does not the hon. Gentleman understand that existing machinery will test the employment status of workers who qualify for the national minimum wage, and that there is a distinction between permanent or fixed-term contracts, whether they are full time, part time or casual, and unpaid voluntary work? The level of the minimum wage will not alter that one bit.

Mr. Hammond: I thank the hon. Gentleman for that intervention. Such machinery may exist, but the new clause will introduce new machinery. It states:
no monetary payments of any description
may be made
except in respect of expenses—

(i) actually incurred…or
(ii) reasonably estimated as likely to be…incurred".


One of our concerns is that payments may not be made entirely and exclusively in respect of expenses that have been incurred.
I was not present at the Minister's meeting with my hon. Friend the Member for Daventry and the hon. Member for Eastleigh. I thank him for his invitation, but I was away on an all-party trip when it took place. Had I

been present, I would have pressed the Minister about people who work few hours for low remuneration, whom we had in mind when we tabled amendment (a).
As the hon. Member for Basildon (Angela Smith) said, amendment (a) is a relatively blunt instrument to deal with the problem that we have identified.

Mr. Robert Syms: My hon. Friend is making a persuasive case in respect of employees, but will not employers have to spend a great deal of money on legal advice to prevent enforcement notices from being served on them, which would be embarrassing, especially to public bodies?

Mr. Hammond: My hon. Friend is right: the cost, inconvenience and embarrassment may be significant. How will organisations that are affected as "employers" react to the jeopardy in which the new clause will place them?

Mr. Bercow: Before my hon. Friend leaves that important matter, has he taken on board the significance of the intervention of my hon. Friend the Member for Poole (Mr. Syms)? The loss that we are considering is of a different character from one that might be sustained by a commercial organisation—it is a monetary loss, and it would represent a deprivation to charity beneficiaries. The neediest people would lose because of these additional costs.

Mr. Hammond: My hon. Friend is absolutely right, and I assure him that I had not failed to take account of the significance of our hon. Friend's intervention. In anticipation of problems, charitable employers and voluntary organisations that employ people under arrangements that leave in doubt those employees' status as volunteers under the Bill might dispense with their services and immediately make the provision of service to the community less effective.
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The amendments propose a crude means of dealing with the problem. They highlight the fact that we are discussing not conventional full-time workers but people who work at charitable or voluntary organisations for a day or a few hours each week for nominal sums or for honoraria. We foresaw the objection, which has been made throughout the passage of the Bill, that the state, through the benefits system, should not have to pick up the tab for low wages or low remuneration. We agree, which is why amendment (a) deals with people who are
not in receipt of any state benefits".
The hon. Member for Eastleigh referred to people in their late fifties or early sixties who have retired early from professional careers. Many of my constituents are such people, and we had them in mind when we tabled the amendment. They may have considerable skills to offer to a voluntary organisation. Although they may be prepared to give of their time generously, they may be unable to do so without being paid.
Amendments (a) and (b) refer to mileage allowances. I should like the Minister to deal with the specific matter of volunteer hospital car drivers, which has been drawn to my attention. The new clause states that expenses may be paid to a volunteer, provided they are "actually


incurred" or reasonably expected to be incurred, but what would happen if different volunteers who drove different sizes of car in different circumstances were paid a fixed mileage allowance that did not reimburse direct costs, but compensated for fixed costs that were not incurred as a result of their voluntary activities?
A significant number of people, many of whom are pensioners, undertake voluntary activities such as car driving for a hospital. That useful and worthwhile community service allows them to continue to run a motor car, which they might not otherwise be able to afford to do on a pension. There is nothing unworthy about such a mixed motive, but the failure to recognise it has been at the heart of the disagreement between Conservative and Labour Members. If the legislation referred to the methods used by the Inland Revenue in deciding whether an amount is part of remuneration, we would not have had to raise the issue. The legislation does not refer to symmetry of treatment in terms of minimum wage calculations and Inland Revenue calculations. When we said in Committee that it might have been better and simpler for the Bill to provide such symmetry, the Minister rejected that notion.
Amendment (a) seeks to include in the Bill the concept of the Inland Revenue's fixed profit car scheme. That scheme will be familiar to hon. Members, because many of them are in it.

Mr. Syms: Those of us who represent rural counties such as Dorset are aware of the tremendous benefits that are conferred by hospital voluntary car drivers. Any suggestion that such services might be imperilled by the Bill must be squashed.

Mr. Hammond: I agree with my hon. Friend. My constituency is not as rural as his, but I understand that my local hospital has 80 volunteer car drivers, all of whom are paid a flat per-mile rate regardless of the size of their vehicles. As there is a single rate for all drivers regardless of the expenses they incur, there must be an element that is considered as remuneration and not reimbursement of expenses, and that would deprive those people of exemption from the legislation. As my hon. Friend suggests, the effect would be catastrophic.
Perhaps the Minister and even local enforcement officers would turn a blind eye to such cases. However, it cannot be a good principle to draft legislation in the hope that it will work because those who are charged with its enforcement will ignore its provisions if that seems sensible.

Mr. Lansley: I am not entirely clear, and perhaps my hon. Friend or the Minister will elucidate. The new clause seeks to exclude people from the national minimum wage, but there seems to be no mechanism for making a declaration or for determining whether a person is excluded. People may assume that they meet the criteria for not qualifying but suddenly find, for reasons that they do not understand, that they are qualified but that no records have been kept.

Mr. Hammond: My hon. Friend raises an important point. An employer would face many perils in such a situation. He may find that he has fallen foul of the Bill's specific record-keeping requirements, and the penalties

for failing to keep records are severe. An employer who is in doubt about the status of payments to a worker has no mechanism for seeking a definitive clarification, and would not be able to rest easy.
I think that it was my hon. Friend the Member for Daventry who said that an arrangement that worked in practice between an employer—I use the word "employer" in the Bill's terms—and a voluntary worker might rumble on for years unexceptionally. However, as the result of a disagreement, the voluntary worker might present his employer with a statement to the effect that he had been reimbursed beyond the amount of his expenses and lay a claim on that employer to be paid at the minimum wage rate for all the hours that he had worked since the start of employment. No doubt the Minister will correct me if I am wrong, but that is my understanding.
Retrospectively, if it were established that a payment that had been made to meet expenses which turned out not to be expenses as defined by the Bill, the worker would have a claim against the employer. That is an onerous situation for a voluntary organisation.

Mr. Bercow: My hon. Friend makes an important point. Does he agree that one possible way out of the serious dilemma would be to indemnify charities and other organisations in advance?

Mr. Hammond: My hon. Friend builds upon the suggestion by hon. Friend the Member for South Cambridgeshire (Mr. Lansley), that perhaps there should be some system of certification in advance so that the charitable organisation and the worker in question would be clear about their status and about whether there was any risk. By accepting subsection (2) of amendment (a), the Minister would deal with that issue once and for all by accepting the methodology of the fixed profit car scheme and agreeing that a fixed mileage payment that fell within the limits that are prescribed by the Inland Revenue would be discounted.
My understanding is that, if any part of any payment to a voluntary worker was deemed not to be subsistence or reimbursement of expenses—

Mr. Syms: My hon. Friend asked whether an employer might face a claim for back minimum wages because there had not been a clear contractual arrangement. Such a claim would cause the employer problems with the Inland Revenue and Customs and Excise, because tax implications would arise.

Mr. Hammond: My hon. Friend's intervention reinforces the points made by my hon. Friends the Members for South Cambridgeshire and for Buckingham (Mr. Bercow).

Mr. Bercow: My hon. Friend is coping stoically with the frequent interventions in his excellent speech. Does he agree—[interruption] Labour Members who chunter unintelligibly are not assisting the quality of the debate. Does my hon. Friend agree that the discovery of earlier non-payments in the public sector will give rise to the serious danger of public finances falling into disarray? The Chancellor will get into a frightful pickle, will he not?

Mr. Hammond: It is interesting to speculate how my local hospital trust, for example, would deal with the


discovery some years down the line that a person who had worked as a volunteer for many years should have been paid the minimum wage throughout that time. I do not suggest that such a scenario will occur regularly, but people sometimes fall out, and working arrangements that are based on mutual trust may fall apart if there is a dispute or disagreement.

Mr. Lansley: Does my hon. Friend agree that difficulties may arise when bodies, including perhaps public sector bodies or voluntary organisation, substitute the work of volunteers for the work of paid employees? The Government acknowledged that possibility in their evidence to the Low Pay Commission.
The difficulty may arise not because volunteers subsequently take issue with their employers, but because their representatives—trade unions for example—may seek to challenge in the courts the use of volunteers. They may assert that they are workers for the purposes of the legislation if they are paid expenses over and above those that were incurred.

Mr. Hammond: I had not considered specifically that point, but I am sure that my hon. Friend is exactly right. Earlier, in relation to hospital car drivers, I had meant to mention precisely the point that other parties may be minded to intervene, even though the Minister and his officials are minded to turn a blind eye. For example, the local taxi firm may like to take any opportunity it can to take a swing at the hospital voluntary car service.

Mr. Lansley: My hon. Friend is being extremely generous in giving way again on this point, but it brings to mind a specific instance in my constituency. Considerable savings, measured in terms of more than £100,000, are expected to be made in the budget of Addenbrooke's hospital by reducing the use of ambulance services and increasing the use of hospital car services. The trade union that represents ambulance drivers may conclude that that is substituting volunteer work, or reimbursed volunteer work, for their work. I hesitate to think what some of the difficult consequences might be of the interplay between those two bodies.

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Mr. Hammond: I thank my hon. Friend for that intervention. We are suggesting not any sinister purpose in what the Government are doing, but that there may be unintended consequences, which could have serious unforeseen effects.
I should like to finish now—

Mr. Andy King: Hear, hear.

Mr. Hammond: I thank the hon. Gentleman for his sedentary encouragement.
I draw attention to one additional point, again relating to my local hospital car service. On Friday, I questioned it very hard about how it operates. I asked whether it was sure that the mileage allowance is all it pays its volunteer drivers. "Yes," it said, "we pay only the mileage allowance." As I was going out of the door, someone called me back and said, "Oh, I have just remembered. At Christmas time, we send them all a £20 gift voucher."

Is it Her Majesty's Government's intention to criminalise such gestures by an employer to voluntary workers? Ministers are shaking their heads, but my understanding of the new clause is that any payment to a person called or claiming to be a volunteer that was not a reimbursement of expenses incurred and not subsistence, would remove that person's exemption from the scope of the Bill, and make him liable to be paid the national minimum wage for all the hours he had been working.

Mr. Bercow: As my hon. Friend was making his point, did he hear the Minister for Small Firms, Trade and Industry say from a sedentary position, "It is a gift"? Does my hon. Friend agree that there is a danger that it might not subsequently be so interpreted in a court of law, especially if it is provided regularly and unfailingly over a period of years? Might it not be considered to be other than a gift? Is that not a serious problem with which we must deal?

Mr. Hammond: My hon. Friend makes an interesting point. I have been advised that the Inland Revenue would treat a regular Christmas gift to an employee of a substantial value as part of remuneration. [Interruption.] If the Minister of State, Department of Trade and Industry wants me to give way, I should be happy to do so.
I think that I have made the points that I wished to draw to the Minister's attention.

Mr. Syms: Is not the implication of my hon. Friend's speech that many charities will formalise their agreements with volunteers, and is there not thereby great potential not only for expense, but for upset between a charity organisation and volunteers, who may have a different idea of their role within that organisation?

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I remind the hon. Member for Poole (Mr. Syms) that his remarks should be made in the direction of the Chair.

Mr. Hammond: I thank my hon. Friend the Member for Poole for his intervention. That is one of the issues about which we are all concerned. All hon. Members have experience of working with volunteers in a voluntary organisation, because, by their nature, all political parties are voluntary organisations.

Mr. Ian McCartney: The Tories do not have many left.

Mr. Hammond: I think that we have rather more than Labour, at the last count. In passing, I take it that the Minister's legislation has not been drafted with the intention that political parties should be included within the definitions of worthwhile organisations that fall within the scope of the new clause.
We all understand the difficulties of working in a voluntary organisation, particularly at the interface between professional paid workers in that organisation and volunteers. That is always an area of some tension. If, as my hon. Friend the Member for Poole has suggested, the new clause causes charities and voluntary organisations to formalise their agreements and to seek to lay down specifically what is and is not required of each party, that may cause considerable dissent and unrest


among a group of people who, by and large, have the best of motives in wanting to assist charities and the communities in which they live.
It is vital that the Government recognise those issues and deal with them. I had hoped that the hybrid motive—the halfway house between a pure volunteer and a full-time worker—would have been recognised and addressed by the Minister when he proposed his new clause and amendments for Report. Sadly, it has not. As I understand it, because of the structure of the Bill, there is no opportunity for Ministers to deal later, by means of regulation, with the issues surrounding the voluntary sector. That is why it is necessary for the Minister to address those issues now. I hope that he will not miss the opportunity to deal with those important points.

Mr. Rowe: I come to the debate without having had the benefit of serving on the Standing Committee and so as to be absolutely certain that my particular preoccupation has been met. I believe that it has been, but I seek confirmation.
For probably more years than is good for the organisation, I have been a trustee of Community Service Volunteers, which still, I think, places more full-time young volunteers in posts than any other organisation in the country. It depends entirely on young people being prepared to accept accommodation and pocket-money subsistence for what they do.
I think that hon. Members on both sides of the House understand the value of the organisation. It has, for example, made it possible for severely disabled people to live in the community: two full-time volunteers undertake to live with a severely disabled person for six months or so, allowing him to conduct a life in the community that would otherwise be entirely beyond him, as no social services department could conceivably provide that sort of 24-hour care.
Of course, the young people learn an enormous amount not only about how to look after disabled people—the disabled person, after a good deal of experience in many cases, teaches much to the young person—but about themselves. Young people who are finding it extraordinarily difficult to get back into the labour market are thus given an opportunity to explore not just one but often two or three avenues in exercising their particular gifts before they hit on the thing that they most want to do.
Plenty of young people who have previously had a life of crime, drug dependency or some other disabling condition are now training to be social workers, to help with mentally handicapped children or to go into teaching. Those young people would otherwise have been lost. That whole process has depended on the fact that they have been able to enter an organisation with a structure, and with 30 years' or more experience of the work involved, and have been able to be taken on, under contracts with local authorities or other employing authorities, for accommodation and subsistence only.
I want the Minister unequivocally to confirm that the intention and practice of the new clause is to safeguard the position of organisations such as Community Service Volunteers, whose value is beyond question. Over the years, it has found places for thousands and thousands of

young people, in almost every case to the great advantage both of those young people and of those who employ them for six months or a year.

Mr. Lansley: I am grateful for this opportunity to add a little to what has been said in the debate so far. Unlike my hon. Friend the Member for Faversham and Mid-Kent (Mr. Rowe), I have the benefit of having served on the Standing Committee, so I know the purposes behind the new clause. However, remembering the debates in Committee, I fear that there are some outstanding issues that have not been satisfactorily dealt with in the debate thus far, and I wonder whether the Minister would take us through them. It may be for the convenience of the House if I list them rather than talking about them at any great length.
The first is an important issue, which impacts on the points that my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) explained carefully and well. As all hon. Members will know, there is an area of activity that is neither wholly voluntary—that is, as the new clause explains, being undertaken solely for expenses or subsistence—nor being carried out by someone who regards himself as on the same or similar terms as those who expect to be paid normal remuneration, a living wage, for that employment.
That could come about for a number of reasons, which have already been explained in the debate. Retired people or others working for a voluntary organisation or charity purely for benevolent purposes rather than for payment may none the less need some small remuneration to assist them in their work. Essentially, such people are working for an honorarium.
It is clear from the Government's evidence to the Low Pay Commission that they understand the practice of paying an honorarium for certain work. I regard an honorarium as a payment that is not designed to reimburse expenses or provide for subsistence, but is a recognition of work in support of a charity or voluntary organisation. A person doing such work is a volunteer, and it could reasonably be argued that he would not be a worker, as defined in clause 52, for the purposes of the Bill.
I freely acknowledge that we debated that matter in Committee, but it is clear that, under clause 52, the contract that might give rise to the definition of someone being a worker for the purposes of the Bill could be implied rather than expressed, orally rather than in writing. We may be dealing with an oral contract of an implied character.
We then have the difficulty that an honorarium may be legally construed as arising from an oral or implied contract. Indeed, the moment the definition of "voluntary organisation" is stretched—and the new clause, for perfectly good reasons, does that to include not only charities but voluntary organisations and statutory bodies—we move into an area where significant numbers of people are paid an honorarium that is not for a volunteer activity but is clearly designed to recognise work that is done under a clear contract.
The example that comes to mind is that of someone on the board of an NHS trust or similar public body. That person clearly is giving his time for what is, in his view, not a paid position—or certainly not at the level of remuneration that would be appropriate for his skills and qualifications. Often, such a person provides hours of


work, even under a contract, considerably in excess of what would be implied by the national minimum wage payment. That suggests that either he would have to be paid a greater honorarium to be a member of that board, or he would have to work fewer hours, or he would have to contract for a given number of hours and then add voluntary hours to that.
A major difficulty that arises from that, which the Government have not resolved—namely, that it will give rise—

Mr. Ian Bruce: My hon. Friend is discussing a very important matter, and I am sorry that the Ministers are not listening.

Mr. Ian McCartney: On a point of order, Mr. Deputy Speaker. We have been listening to the debate for an hour and a half, during which time the hon. Gentleman has not even been in the Chamber.

Mr. Deputy Speaker: That is not a point of order for the Chair, but the hon. Member for South Dorset (Mr. Bruce) will have heard what the Minister said.

Mr. Bruce: Thank you for your defence, Mr. Deputy Speaker.
In the minutes of almost every annual general meeting, including Labour party AGMs, is recorded an honorarium paid to a named accountant for a certain amount of auditing work. Obviously, it takes that person far more hours to do the necessary work than is covered by the small honorarium that he is paid. Under the Bill, will every organisation paying such an honorarium be breaking the law?

Mr. Lansley: My hon. Friend makes a very good point. I am sure that we could find many more such examples. They proliferate in the charity and voluntary sector, not least because organisations are often at pains to establish, in writing, that people have certain responsibilities, and to recognise those responsibilities. The whole purpose of an honorarium is that it is a formal recognition of work done. In those circumstances, it is highly possible that, under the Bill, that will imply a contract being established between the organisation and the person.
The new clause does not provide an opportunity for a voluntary organisation or a charity and the person who, in whatever capacity, does work for it, to make a declaration that that work is being freely done for the charitable purposes of the organisation and therefore should not qualify for the national minimum wage. There is no mechanism by which someone could disqualify himself from the national minimum wage so that he can work for a charity or voluntary organisation for less than the national minimum wage rate.

Mr. Bercow: Does my hon. Friend agree that, unless the Government deal with the issue of honoraria, one or two outcomes will inevitably follow in the case of an NHS trust? Either the trust's wage costs will rise—which would

be damaging and no doubt at the expense of patient care—or the person on the board will cease to serve and will be replaced by someone who can afford to serve for nothing, a genuine voluntary worker. Would it not be an extraordinary move to deprive the board of expertise because of the Bill's silliness?

Mr. Lansley: My hon. Friend paints two scenarios, but I suspect that there is a third. It is that someone contracted to be a member of an NHS trust board will work formally for a relatively small number of hours at the national minimum wage rate, but voluntarily for a number of hours over and above that time. The Minister might think that that is an acceptable outcome, but I think that it would be a rather undesirable one.
Across the voluntary and charitable sector, many people will think that it is very tiresome if they qualify for the national minimum wage in respect of some of what they do for an organisation but are considered a volunteer in respect of other activities. They will be drawn into the panoply of national minimum wage legislation for purposes of qualification, record keeping and providing records; but that may bring the entire system into disrepute in charitable and voluntary organisations. I do not think for a moment that any of Opposition Members' suggestions would have impeded voluntary organisations in pursuing an employment policy in which they provided a national minimum wage on the same basis as any other organisation and complied fully with employment legislation.
Legislation will come into disrepute if it prevents charities and voluntary organisations from recognising that people—millions of people, as the Government's submissions to the Low Pay Commission have made it clear—who serve as volunteers have special characteristics that will occasionally have to be recognised in the national minimum wage structure.

Mr. Syms: Another issue is the status of retained firemen and lifeboat men. How will their status fall within my hon. Friend's arguments?

Mr. Lansley: My hon. Friend is testing me. As my hon. Friend the Member for Daventry (Mr. Boswell) said, the Minister will have to respond to those issues. However, to the extent that such persons are actively employed in the fire or lifeboat service, they should be paid the national minimum wage.
The Bill raises the issue whether one would qualify for the national minimum wage for the period in which one is waiting for a call but not working, but I think that you, Mr. Deputy Speaker, would say that I was out of order if I explored that issue, which is dealt with in the Bill's provisions on the definition of hours worked rather than in new clause 1, which deals with voluntary workers. Those firemen and lifeboat men clearly would qualify as workers, whereas the new clause would exclude from such a qualification those who work voluntarily for voluntary and charitable organisations.

Mr. Ian Bruce: I think that my hon. Friend has misunderstood the point made by my hon. Friend the Member for Poole (Mr. Syms), which was that some people who volunteer to work on the lifeboats are paid a


call-out fee, which is bound to be below the national minimum wage. I suspect that they—like volunteer coastguards—would work for nothing rather than force lifeboat organisations to pay the minimum wage. Unless Ministers act on those issues, they will find either that they have no volunteers or that they will have to put a lot of money into those activities.

Mr. Lansley: I am grateful to my hon. Friend. Rather than delaying the debate myself by dealing with the issue, it might be simpler if I directed it to the Minister—who will perhaps reply to the issues raised by my hon. Friends the Members for Poole (Mr. Syms) and for South Dorset (Mr. Bruce). I am sure that, from their constituency knowledge in Dorset, they are especially aware of the circumstances and value of the lifeboat service.
My first point was how we will deal with honoraria—on which I made an intervention earlier. I am surprised that Ministers should have tabled new clause 1 in its present form, as it clearly does not deal satisfactorily with honoraria—on which they have consulted the Low Pay Commission but on which they have presumably not yet received an answer.
The hon. Member for Eccles (Mr. Stewart), who has left the Chamber, said that we could solve all those problems simply by using existing legislative machinery. That gives rise to the question of how he envisages such machinery working. If he was referring to the Employment Rights Act 1996—which I suspect he was—why have Ministers not referred to such current legislation in the Bill?
It always assists our debates if we can use existing statutory definitions, as we can not only read previous debates on them but see how such definitions have been interpreted in practice and tested in the courts. Moreover, would should then not have had to examine the new clause de novo. If the hon. Member for Eccles can enlighten us on how existing machinery can be used, perhaps we will be able to suggest to Ministers that they do exactly that, rather than asking the House to devise entirely new machinery.
Although it was not explicitly stated in the Standing Committee, Ministers have gone to the trouble of including in the new clause references to statutory bodies. It is interesting that they should have done so. The second limb of the new clause makes it clear that, when a charity agrees that a person should do work for charitable purposes, that work may be done for a statutory body. Presumably, the work could entail, for example, helping out with work commissioned by a parish council.
The first limb of the new clause—in subsection (1)—excludes from the Bill's provisions not only volunteers in charities and voluntary organisations and their associated fund-raising bodies but persons in statutory bodies. That means that we are effectively creating an entire class of volunteers in the public sector who will be excluded from qualifying for the national minimum wage.
I should be grateful if the Minister will take us through the train of thought—he did not deal with it in opening the debate—that led the Government to abandon the practice proposed in clause 42, which will be deleted by Government amendment No. 20. Why did Ministers feel

it right to include in the new clause such a definition of statutory body so wide that it will include every statutory body established by every Act?

Mr. Hammond: In Committee, Opposition Members mentioned volunteers in the public sector—such as classroom assistants in schools and NHS volunteers. Is it not possible that what gave rise to the Minister's train of thought was no more subtle than a telephone call from No. 11 Downing street telling him that he had to include the public sector so as to ensure that there was not a consequent large increase in public expenditure as a result of that sector's not being able to use volunteer workers?

Mr. Lansley: I am grateful to my hon. Friend. As he has raised that point, I shall leave it to the Minister to tell us his precise train of thought. This is another instance in which—my hon. Friend is right—some of the points made by Opposition Members have led the Government to make the changes that they have made. Although the Minister, in response to an earlier speech, ungraciously said that that was not true, I suspect that it is.
I should like to emphasise another point, which was raised by the hon. Member for Eastleigh (Mr. Chidgey), and with which we will deal later in the debate. It is a great pity that references to training in the new clause include only training specifically designed for people performing a specific voluntary function. I shall not elaborate on the point—the hon. Gentleman has already dealt with it better than I could—but all hon. Members will know of people who undertake voluntary work in a charity or voluntary organisation primarily from altruistic motives but who think that there may be a beneficial secondary gain: work experience and training.
The training that volunteers acquire is by no means necessarily job-specific. From my visits to charity shops in and around my own constituency, I know that some people who work in them—particularly young people with learning disabilities—are acquiring, as the hon. Member for Eastleigh said, much more than job-specific skills: they are acquiring broader social and other skills that are designed to assist them in moving into paid employment in the workplace, where they should be able to attract the national minimum wage. It would be a great pity if, by passing new clause 1, we excluded such wider training, which could be very advantageous to those who are working for charitable organisations. I do not think it likely that any damage or mischief would be done if we included such training.
Let me make a fourth point to the Minister, which I do not think has been raised yet. The Minister has told us that associated fund-raising bodies will be included, and that will allow the inclusion of training enterprises associated with charities; but how far does that go? We know that some charity shops and other organisations remit all their profits to the charities that are, effectively, their sponsors and owners. In certain circumstances, however, charities—I do not criticise them for a moment—are increasingly lending their auspices to bodies that may not remit all their profits to those charities, and are not necessarily owned by them.
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The part of the new clause that deals with associated fund-raising bodies refers to a body
the profits of which are applied wholly for the purposes of a charity",
but it does not say that the body must be wholly owned by that charity, or that there may not be other subsidiary associated bodies that are not necessarily remitting all their profits to the charity. I hope that the Minister will tell us where the boundaries governing associated fund-raising bodies will lie in future, in relation not only to profit but to ownership.
My fifth and last point relates to political parties. The Minister has not responded to my hon. Friend the Member for Runnymede and Weybridge, who asked whether political parties would be treated as bodies qualifying by virtue of being voluntary organisations. If it is intended to exclude them, I think that considerable difficulties will ensue—not least, perhaps, for the Labour party. As we have discovered, Labour Members tend to employ a number of researchers and others at what would have been well below the going rate for the national minimum wage in past years, and perhaps still is. If they were required to pay all those researchers the national minimum wage, the bids that would have to be made to the Joseph Rowntree trust would be all the greater, and might embarrass Ministers all the more.

Mr. Rowe: My hon. Friend should understand—indeed, I am sure he does, as he has worked at the heart of a voluntary party organization—that too much transparency could damage democracy. When I worked for the Conservative party, party workers told us that floods of trade union officials were coming in to do by-election work, and asked us to complain bitterly that that constituted a monstrous breach of the spirit of the legislation. I remember the then chairman of the party—the late Lord Thorneycroft—saying that he had noticed with some delight how many paid agents of the Conservative party had chosen to take their annual holiday at the time of the by-election. I think that to force too much transparency on the operations of political parties is more likely to destroy than to enhance the democratic process.

Mr. Lansley: My hon. Friend tempts me to embark on a discussion of the characteristics of political parties more generally. If by "transparency" he means laying political party organisation open to the wider view of the public, I agree with him to some extent. Political parties are not designed to be agents of the state, and ought not to be such agents. If we construct a system whereby they become simply an extension of the accountability regime applying to public organisations, we shall subvert their essential function, which is not to be part of the state but to operate outside it. As I am sure my hon. Friend agrees, that does not mean for a minute that we should forgo accountability within a political party to its membership, but there may well be a distinction between accountability to membership and accountability to the state. Those who talk about transparency often mean accountability to the state.
We need to know at this stage whether the Minister intends political parties to be covered. If they are to be covered, there will clearly be an opportunity to exclude

volunteers in political parties from qualifying, in the same way as those in any voluntary organisation. That is important, not least because—as my hon. Friend the Member for Faversham and Mid-Kent pointed out—employees of political parties often have to become volunteers at certain times. If an agent wishes to canvass, for instance, he must do so in his own time, because he cannot be paid for canvassing. I feel that such distinctions should be reflected in the legislation.
If for any reason political parties are excluded from the definition of "voluntary organisation" or "benevolent purposes", I think that we shall have serious problems. In many instances, those working with political parties will be treated as "workers" by virtue of the inclusive character of the provisions, and will be unable to carry out their work in a voluntary capacity. In that event, the activities of political organisations will be damaged.
The new clause is rightly designed to respond to points made in Committee, and it has done so to an extent. I was not party to the discussions between those on the Front Benches, but I fear that some difficulties remain. I have a general sense that, if this is to be done right, the process is becoming unduly complex, for two reasons. First, there is the inclusive character of the rest of the legislation, which is designed to ensure that—in all circumstances other than those that are expressly excluded—everyone qualifies for the national minimum wage. I understand why Ministers set out to do that, but it is causing difficulties in relation to charities and voluntary organisations.
Secondly, Ministers have not chosen to take thepossibly—altogether better route of allowing people to reach agreements allowing their exclusion by virtue of their own free will. That would have been much simpler than setting out tortuous definitions that prompt questions.

Mr. Ian Bruce: Will my hon. Friend give way?

Mr. Lansley: Yes, for the last time.

Mr. Bruce: Surely Labour Governments have always stood for giving people the right to negotiate their wages, and to have them negotiated by others on their behalf. Is it not scandalous that people should be told that they can no longer negotiate their wages, if they want to take less money than the Government think they do?

Mr. Lansley: Yes. It is astonishing that people wishing freely to enter into an agreement with a charity or voluntary organisation to work for less than the national minimum wage—as is perfectly possible—should be legally prevented from doing so. Such people might be forced to choose between not doing the work at all, and doing it at a cost that would significantly impair the return to the charity for its own charitable purposes. Alternatively, they might have to undertake to do the work on a voluntary basis, thus finding themselves considerably disadvantaged. Such people would have been perfectly willing to do their work in a way that would benefit themselves, the charity and its beneficiaries.

Mr. Ian McCartney: We have been debating the new clause and amendments for just over two hours, although at the outset the hon. Member for Daventry (Mr. Boswell) expressed general support for the Government's proposals, following extensive consultation between the political parties and the voluntary sector.
Let me begin by reassuring the hon. Member for Faversham and Mid-Kent (Mr. Rowe). A letter from Community Service Volunteers gives some idea of the charities' view, and of whether they believe that the Government are meeting their needs. I know of no charity that has submitted evidence to the Low Pay Commission, or has commented in the public domain, that does not support the principle of a national minimum wage. They find it wholly inappropriate for Opposition Members to take their names in vain in an attempt to undermine their support for the national minimum wage. On 5 March, CSV wrote expressing its appreciation for the discussions that it had with officials in the Department. The letter stated:
We are entirely satisfied with the new amendment and particularly pleased that our full-time volunteers will be able to continue to receive accommodation, meals and a subsistence allowance. Your team were very helpful. Please pass on my thanks. I hope the rest of the Bill passes as smoothly as possible for you.
That covers the entire context of this afternoon's debate.
The hon. Member for Daventry raised a number of issues. He mentioned Irish charities, and I am quite sure that he did not intend to challenge or attack them. There are hundreds of Irish charities in Britain doing very good work for the Irish community and the community in general.

Mr. Boswell: Of course I did not mean to do that. My remarks were framed metaphorically. The House may be interested to know that Northern Ireland still holds the palm as the most generous part of the United Kingdom for donations to charity.

Mr. McCartney: Indeed. I was glad to give the hon. Gentleman the opportunity to clarify what he said. I know from our discussions in public and in private that he would never intend his comments to be interpreted in that way. However, there are mischievous people within and outside Parliament in respect of comments by politicians.
The hon. Gentleman mentioned small charities. Many of us have worked with small charities. The purpose of the new clause is that small charities run exclusively by volunteers would be excluded from the provisions of the Bill, so there would be no problems in that respect.
The hon. Gentleman also said something about rates of pay. Many charities pay decent wages and provide decent conditions for their employees. They reject and resent any allegation that the minimum wage would undermine their capacity to continue their work. Most in the charitable sector are good employers and want to pass on good practice to other charities. Many of them work together to secure good employment practice. However, they also want to make a clear distinction between employees and volunteers. The new clause seeks to clarify that, and I believe that it does so effectively.
My hon. Friend the Member for Basildon (Angela Smith) spoke about the professionalism of volunteers. No one would disagree that, although volunteers give their time and effort freely, their skills and knowledge give added value to the charities concerned and the individuals that they seek to benefit. The skill, professionalism and dedication of volunteers provides added value and benefit to the activities of those who work in all parts of the charitable sector.
I hope that, in my intervention in his speech, I gave the hon. Member for Eastleigh (Mr. Chidgey) a clear indication of our position, and I hope that I do not have to add anything to my response to the points that he has raised with me publicly and privately.
The hon. Member for Runnymede and Weybridge (Mr. Hammond) raised a range of issues to which I shall come in a moment. However, I was disappointed by his churlish attitude to the group of amendments, although I understand that he was genuinely unable to come to the meeting and I apologise that I was unable to arrange a subsequent meeting with him. I recognise that he spent a great deal of time in Committee putting his case. When I address his specific amendments, I shall explain why I am somewhat disappointed by his attitude.
On the continuum of employment for unpaid volunteers, the voluntary sector made it clear to us in response to consultation that they wanted no such thing. They wanted a clear distinction between employees of charities and volunteers. That is what we have provided in the new clause, and that is why they wrote to us accepting it.

Mr. Lansley: In passing over the comments by the hon. Member for Eastleigh (Mr. Chidgey), the Minister has not adequately answered the points that he raised about training. Elsewhere in the Bill it is possible to specify a training rate of the national minimum wage. It is also possible to exclude trainees altogether. However, it does not seem possible to do what the hon. Member for Eastleigh and I were asking for—to exclude from account for workers in voluntary organisations the cost of training attributable to them.

Mr. McCartney: I dealt with the matter more than adequately. If someone undergoes training in health and safety, it is generic training, but it is also specific, as training in health and safety has set principles and purposes. The reason for the training may be specific to the individual, although it may be a generic training programme. That is not a problem under the Bill, and I feel that my answer was more than adequate.
The hon. Member for South Cambridgeshire (Mr. Lansley) asked whether the Bill would challenge an honorarium. A genuine honorarium is not legally binding; it is a contribution, not a wage, and the person receiving it is not an employee. The hon. Gentleman raised honoraria in that context as a smokescreen to undermine the purposes of the new clause.

Mr. Boswell: Will the Minister give way?

Mr. McCartney: No. Opposition Members had two hours in which to put their case. I am trying to deal with the points that they raised as quickly and efficiently as possible.
Amendments (a) and (b) would turn the voluntary workers' clause into something quite different. Instead of allowing genuine volunteers not to be caught up in the Bill, it would provide an exclusion for part-time workers working for charities, voluntary associations and statutory bodies. It would blow a large hole in the Bill—as is entirely consistent with the approach of some Opposition Members.
The overall effect would be to limit the range of persons within the exclusion to those not on benefit and pensioners who work for up to 20 hours a week and to increase the weekly remuneration that they could receive to 10 times the national minimum wage—over and above reasonable day-to-day subsistence and accommodation.
Taken individually, there seems no rhyme or reason to any of the elements in amendment (a). Limiting the range of voluntary workers to those working fewer than 20 hours per week would arbitrarily entitle full-time volunteers who, according to the National Council of Voluntary Organisations, work more than 30 hours per week, to the national minimum. In our view, it is not a genuine amendment, but an attempt to catch volunteers in a way that was never intended.
Similarly, the suggestion of benefits up to a weekly amount of 10 times the hourly rate of the national minimum wage seems entirely arbitrary and to have no clear basis.
Amendments (a) and (b) also refer to the fixed-profit car scheme. The hon. Member for South Cambridgeshire said that, in almost all circumstances, we should look to using existing machinery, and that is precisely what we have done. The fixed-profit car scheme was introduced by the Conservative Government in 1990. All the issues that the hon. Member for Runnymede and Weybridge raised in respect of the scheme really relate to the Finance Bill and not the National Minimum Wage Bill.

Mr. Hammond: Will the Minister give way?

Mr. McCartney: No. I shall explain why that is the case.
The fixed-profit car scheme is a non-statutory scheme which employers, employees, volunteers or anyone else can use to calculate whether or not there is a profit element in their mileage allowance, if they get one. Only the profit element is liable to tax, so there is no tax liability if the mileage allowance is within the limits set by the Inland Revenue. The purpose of the scheme was to reduce record keeping. It has clearly been a non-contentious issue in political terms since 1990, so I see no reason for its inclusion. If the hon. Member for Runnymede and Weybridge has complaints about it, he should raise them when we debate the Finance Bill later this year.

Mr. Hammond: I accept what the Minister says about the fixed-profit car scheme. The purpose of including it is that the same mechanism should be used for determining whether any payment has been made that would exclude a worker from the exemption from the national minimum wage. The issue has nothing to do with tax. It is a separate calculation to be carried out under the Bill.

Mr. McCartney: The purpose of the proposal is to ensure clear limitations on payments. We have set out a clear way forward on that, with the approval of the charities. The hon. Gentleman raises issues concerning the fixed-profit car scheme that have been set out in Finance Acts since 1990. He has said nothing to undermine the context of the new clause. If there had been a difficulty,

the charitable and voluntary sectors would have told us. The hon. Gentleman has raised spurious points that do not stand up to examination.
I should like to finish, because we have some other important issues to consider this evening. The hon. Member for South Cambridgeshire talked about political parties. They are not philanthropic. Under no circumstances will the volunteers who work for them be caught by the Bill. We are not interested in what members of the Conservative party do, but we should be interested if they published their accounts, please. That would be more interesting than publishing details about members and their voluntary efforts. I ask my hon. Friends to support the new clause and to oppose the amendments to it, if they are put to a vote.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New clause 2

INFORMATION OBTAINED BY OFFICERS

'.—(1) This section applies to any information obtained by an officer acting for the purposes of this Act, whether by virtue of paragraph (a) or paragraph (b) of section 13(1) above.

(2) Information to which this section applies vests in the Secretary of State.

(3) Information to which this section applies may be used for any purpose relating to this Act by—

(a) the Secretary of State; or
(b) any relevant authority whose officer obtained the information.

(4) Information to which this section applies—

(a) may be supplied by, or with the authorisation of, the Secretary of State to any relevant authority for any purpose relating to this Act; and
(b) may be used by the recipient for any purpose relating to this Act.

(5) Information supplied under subsection (4) above—

(a) shall not be supplied by the recipient to any other person or body unless it is supplied for the purposes of any civil or criminal proceedings relating to this Act; and
(b) shall not be supplied in those circumstances without the authorisation of the Secretary of State.

(6) This section does not limit the circumstances in which information may be supplied or used apart from this section.

(7) In this section "relevant authority" means any government department or other body which is party to arrangements made with the Secretary of State which are in force under section 13(1)(b) above.'—[Mrs. Roche.]

Brought up, and read the First time.

The Minister for Small Firms, Trade and Industry (Mrs. Barbara Roche): I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this, it will be convenient to discuss the following: Government new clause 3—Information obtained by agricultural wages officers.
Government amendments Nos. 33, 39 and 34.

Mrs. Roche: The purpose of the two new clauses and related amendments is to remove unnecessary obstacles to the exchange of information between different enforcement authorities that might handicap the effective enforcement of the national minimum wage or agricultural


minimum rates. That makes sense for effective implementation and to help reduce burdens on business. We do not want authorities operating in the same area to be hamstrung because they cannot talk to each other or pass on relevant information. Nor do we want them to be treading on each other's toes or the toes of the companies within their responsibility.
The information that might be exchanged will be limited. We are not proposing an all-embracing mechanism under which information collected for one purpose will be freely available for others to use for any other purpose. In each of the new provisions, we closely limit the information that may be exchanged, the circle of those who may exchange it and the purpose for which it may be used. They must all be related to enforcement of the national minimum wage or agricultural minimum rates.
There is inevitably some contingency about the provisions. We are still considering the most effective means of enforcement, balancing our wish to secure an approach based on self-enforcement with our determination to ensure that unscrupulous employers—hon. Members on both sides of the House have said frequently that such employers are few—will not be able to evade their responsibilities. We must consider carefully who might best enforce the national minimum wage when we have seen the Low Pay Commission's report. The provisions need to cover the possibility of one or more bodies being responsible for enforcement.
The purpose of the new clauses and related amendments is simple: to ensure that information relating to the national minimum wage or to minimum pay rates in agriculture can be exchanged among the authorities responsible for enforcement.

Mr. Ian Bruce: I note the great detail of the information. I am sure that the Minister is privy to the Government's thinking on the data protection legislation. Has she considered whether the proposals may put in jeopardy employers who do not keep the information as securely as they need to under that legislation?

Mrs. Roche: I can reassure the hon. Gentleman that the new clauses and amendments relate to enforcement and the inter-relation of different Acts. It will be possible to use such information as a basis for mounting prosecutions, if necessary. If officers of two or more agencies are appointed or commissioned under clause 13, there should not be any unnecessary obstacles in the way of their exchanging information about the national minimum wage.
New clauses 2 and 3 establish the shape of our intentions. The purpose and effect of the related amendments Nos. 33, 39 and 34 should become apparent. New clause 2 deals with the exchange of information between two or more national minimum wage enforcement officers working for different enforcement bodies, regardless of whether either enforcer is responsible for enforcing the national minimum wage in the agriculture sector.
One agency will be able to pass national minimum wage information to the other agency or agencies. As I have said, the nature of the information that may be exchanged, the circle of those who exchange it and the purpose for which it may be used are all limited to matters relating to the enforcement of the national minimum wage.
Subsection (1) of new clause 2 establishes that the information in question has been obtained by an officer who has been appointed by the Secretary of State or commissioned by the Secretary of State from another Department or Crown body. It also establishes that the information must have been obtained for purposes related to the national minimum wage.
Subsection (2) specifies that the information is treated as held by the Secretary of State. Subsection (3) allows the information to be used by departmental officers or officers belonging to the Department or body that obtained the information for any purpose relating to the national minimum wage. Subsection (4) allows information to be supplied by any relevant authority to any other relevant authority with the authorisation of the Secretary of State. Again, such information may be used for any purpose relating to the national minimum wage.
Subsection (5) allows information to be supplied outside the immediate circle of national minimum wage enforcement bodies, but only for the purpose of civil or criminal proceedings relating to the Bill. Evidence about a breach of the national minimum wage provisions could be supplied to a worker to help bring criminal or civil proceedings against their employer. Again, any such information supply must be authorised by the Secretary of State.
Subsection (6) makes it clear that the provisions on information exchange for national minimum wage purposes are not intended to prevent the passing on of information that could otherwise be passed on. Subsection (7) defines a "relevant authority" and the closed circle that I have already referred to of national minimum wage enforcement bodies.
New clause 2 enables the different national minimum wage enforcers to exchange information for better enforcement. There was a great deal of discussion about better enforcement, much of which was led by the hon. Member for Daventry (Mr. Boswell), in our very good debates in Committee.
New clause 3 and the related amendments Nos. 33, 39 and 34 deal similarly with agricultural wages inspectors in England and Wales, Scotland and Northern Ireland. They are designed to cover two parallel situations. They each relate most probably to a situation in which information is obtained from an employer whose activities straddle agricultural and non-agricultural operations and whose staff consist of a mixture of agricultural and non-agricultural workers. The hon. Member for Daventry will have had experience of that—personally, as well as in his capacity as an hon. Member. Experience is always useful when discussing such matters.
New clause 3 covers cases such as where agricultural wage inspectors visit an employer who employs agricultural and non-agricultural workers and uncover evidence of non-payment of the national minimum wage to a worker who is not employed in agriculture or who is not entitled to agricultural minimum wage rates. In such a situation, it makes sense for inspectors to be able to pass on the information to the relevant national minimum wage officer.
The second situation is dealt with by amendments Nos. 33, 39 and 34 and is the reverse of the one I have just described. A national minimum wage officer might uncover evidence of non-payment of an agricultural


minimum wage rate during inspection of a packhouse, where only a few workers are employed in agriculture. In that situation, it also makes sense for the national minimum wage officer to pass such information to the agricultural wages inspectors.

6 pm

Mr. Boswell: Is the Minister saying that, if there is evidence of non-compliance with agricultural wages legislation, notwithstanding compliance with the national minimum wage, the national minimum wage enforcement officer would pass the information to the agricultural wages inspectors?

Mrs. Roche: Yes, the hon. Gentleman is absolutely right. We rightly spent a deal of time in Committee going over the connection between the two areas. We have tabled the new clauses and amendments to clarify the matter.
New clause 3 is similar in design and structure to new clause 2. Subsection (1) establishes that the information covered is information obtained by an agricultural wages inspector under agricultural wages legislation. Subsection (2) allows the information to be supplied to the Secretary of State for the purposes of the Bill. Subsection (3) allows the Secretary of State to pass the information to another Department or body.
Subsection (4) allows the recipients of information to pass it on, in limited circumstances and only with the authorisation of the original supplier of the information, to another person or body for the purposes of bringing civil or criminal proceedings under the Bill. For example, if the national minimum wage officer did not want to bring civil or criminal proceedings against a worker's employer, the information could be passed to the worker so that he or she could do so.
Subsection (5) makes it clear that the provisions on information exchange for such purposes do not prevent any passing on of information which would otherwise be lawful. Subsection (6) defines "agricultural wages legislation" and "relevant authority" to cover each of the three agricultural wages regimes in England and Wales, Scotland and Northern Ireland.
Amendments Nos. 33, 39 and 34 each allow information obtained by national minimum wage officers to pass in the opposite direction, so that it could be used for enforcing agricultural minimum rates by the agricultural wages inspectors in England and Wales, Scotland and Northern Ireland—the very point made by the hon. Member for Daventry. However, the amendments exclude information that is not strictly pay related, such as information relating to holiday entitlement and other terms and conditions. The nature of the information that may be exchanged, the purpose to which it may be put and the circle of those who may exchange it are limited along lines similar to those described in new clauses 2 and 3.
I am convinced that the proposed changes will improve the operation of the Act, both for those responsible for enforcement and for workers and employers. I am also convinced that we have built in necessary limitations so that information can be used only for the purpose of enforcing the national minimum wage or agricultural

minimum rates. I have taken a little time to go into some of the detail, for which I hope the House will forgive me. I have done so because it is important to explain to the House exactly what we mean to do. The proposals form a very important part of the Bill. I believe that this is the right approach, and I commend the new clauses and amendments to the House.

Mr. Boswell: I genuinely thank the Under-Secretary for her explanation. These are not simple matters; they do not leap off the page. Such a clear definition is valuable to the House and to those who read our deliberations. In the spirit of her ingratiating—though not intentionally so—remarks, I should say at the outset that I would not seek to oppose what she is doing.
In a sense, the provisions have come to light because the Government have not yet decided on the enforcement structure they will apply to the national minimum wage under clause 13. We know only that there is an agricultural inspectorate and that there will be wages officers in other capacities who will be able to enforce the legislation; we do not have a precise blueprint. Perhaps one ought not to quibble about that. It is much better that the Bill should be made practical and sensible and that it should work in the most economical way possible. That is no issue between the two sides of the House.
It occurs to me that new clause 2(7) refers to the "relevant authority" being
any government department or other body which is party to arrangements made with the Secretary of State which are enforced under section 13(1)(b) above.
It will be important later for Ministers to consider the extent to which, for enforcement purposes, those arrangements can be made public. If, for example, somebody turns up at my farm—an interest that I have declared in the context of these debates—or at some other business with which I may be involved, and claims to be an officer for that purpose, it is very important that that is keyed in. It would also be helpful if that was clearly explained in advance to relevant interests.
There is a tension in all this. Information—knowledge—is power. It is important and sensitive, and may sometimes be confidential. It is very important that it does not get into the wrong hands. Conversely, it is important that it should be available for the right purposes. That is a balance that all Ministers have to strike. I do not twit the Government for not proposing such extensive and meaty provisions in Committee. The new clauses and the amendments look slightly like afterthoughts. Perhaps they are good afterthoughts. That is what we now need to discover.
We need to consider two areas: one general and one specific. The first concerns the acquisition and control of information by the Secretary of State. New clause 2(2) is a rather deathless, or curt, sentence:
Information to which this section applies vests in the Secretary of State.
I was irresistibly drawn to the comparison with the coroner, who owns the body. The important aspect is what the Secretary of State is to do with the information and where it should be relevant. The Under-Secretary eloquently explained that the intention is that the Secretary of State should make information relevant to the Act available only for the purposes of enforcing the Act. I note that she is nodding.
The construction of new clause 2(3), which states:
Information to which this section applies may be used for any purpose relating to this Act by—
(a) the Secretary of State",
is not quite as narrow as the Under-Secretary intended it to be. The Secretary of State might want to make a speech, for example, in which she describes how good the Act is or how triumphant the national minimum wage has proved to be in practice, despite the concerns expressed by Opposition Members. I am not sure how she might do that or whether it would be proper to use internal enforcement information for the purpose. Conversely—I am weighing the dilemma myself—the Opposition find any information bestowed on us by the present Secretary of State or her colleagues a bonus.
From time to time, my right hon. Friend the Member for Wokingham (Mr. Redwood) asks a series of parliamentary questions; he does not always receive an answer. He is distressed and concerned about that, because it reduces his ability to probe and, if necessary, harry the Government.
I never receive a priority written answer on time from the Department of Trade and Industry; it always slips by at least a day. Lest the Minister think that I am singling her out, I should say that on 27 October a Minister in another Government Department promised in a written answer that she would write to me to answer my question on, I suspect, a somewhat sensitive matter. I have a fairly rudimentary bring-up system and I have just noticed that I have not yet received an answer, so I must return to that one.
A balance must be achieved. I think we all know that, although the Secretary of State wants to use the information for the best purposes, to some extent it will have a public face. Sometimes it would be proper to draw on that information in a policy speech. We welcome openness where we can persuade the Department to carry out such a policy. We might even have to welcome openness if, subsequently, the Department is forced to admit that the whole enterprise of the national minimum wage is a signal failure—and we should like the Secretary of State to come clean about that, too.
There is also what might be called the micro-dilemma. What happens to locally amassed information relating to individual employers or enterprises, which is then sent, nominally to the Secretary of State but in fact to her officials, and used for enforcement purposes?
The Under-Secretary rightly says that it is necessary— sensible— for information to be exchanged between public authorities for enforcement. I do not quibble with that—it is entirely proper—but the counterpart of making the information more readily available than it probably would have been if new clauses 2 and 3 had not been tabled is that there is more of it about. There is more of it to leak to the wrong people or, conceivably—although I sure the Under-Secretary would not want her officials to do so; perish the thought—to be abusively released in a way that would breach confidence or create embarrassment for individuals, improperly.
I am not drawing the Government's attention to that potential set of circumstances. I suspect that, if I did, the Under-Secretary would tell me that there are legal defences and that the Department of Trade and Industry would have to resist a legal challenge if there were some malicious disclosure by officials. I understand that, but

that is not the case that I have in mind. There are two points on which I seek assurance about the interests of the citizen or the employer on whom a report might be made which may be referred from one set of enforcement officers to another.
What would happen if, under new clause 2(5), the information was disclosed with the authorisation of the Secretary of State and supplied for the purposes of any civil or criminal proceedings relating to the Act—it is sent back to the employee to enable them to consider whether to bring proceedings in an employment tribunal or civil procedure—but the employee abused the information?
The Under-Secretary may remember some exchanges that we had at a late hour—or was it an early hour?—about the possibility of a similar thing happening when a worker took a third party to look at the employer's employment records. It is in my mind that, as a result of malice or even inadvertence, the worker, or the party to whom the Secretary of State might disclose the information, could make it available to another person.
If the information has to be used in civil or criminal proceedings, that would come out in open court, but if the case did not come to court and the information was leaked to a third party and was damaging to the interests of the employer who had originally generated the information, would that be the responsibility of the Secretary of State, through her officers, or would it be the responsibility of the person to whom the information was made available for the purposes of civil or criminal proceedings?

Mr. Bercow: My hon. Friend is dealing with this point in an exemplary fashion. What worries me, however, is the possibility that the information might be leaked, without the authorisation of the Secretary of State, to a business rival. In such circumstances, would any redress be available to the employer who had been offended and discriminated against in that unseemly way?

Mr. Boswell: That is a perfectly fair point, additional to the ones that I am making. Not only is information about employment practices probably confidential among the parties concerned, it is of considerable interest to an employer to help the latter understand what is going on.
In this context, there is another, separate, issue. If information that is relevant and exists simply for the purposes of the Act is disclosed to a third party, what is the legal position if additional information is accidentally embodied with it? I remember some rather similar discussions taking place during the passage of the Bank of England Bill.
Sadly, there is always the possibility that papers will be accidentally stapled on. The other day, by mistake, I sent a letter to a third party—and not to the person for whom it was intended. The third party was civil enough to return it, but what would have happened if they had used it? It might have been—although in this case it would not have been—embarrassing. It is important to pin the responsibility in such circumstances. I do not seek to sling it round the neck of the Secretary of State.
If information is disclosed to a third party under this procedure for the purposes of civil or criminal proceedings—and therefore, in a sense, for finer purposes and in confidence, under a sanitised procedure—what


happens if it is published? Is there any liability on the publisher of that information for what has happened if it gives rise to commercial damage to the individual?
These are genuine points about what might loosely be called civil liberties and the interests of employers that should be considered as part of the powers that the Secretary of State and her Ministers seek to take to extend the powers of information. For the reasons that I gave at the start of my remarks, I shall not cavil at the Minister's method—on balance, it is probably the right thing for her to do—but it is important in all these matters that confidential information is not leaked, that it is not made available in a way that may be abused by a competitor, and that if anyone allows that to happen, either by accident or maliciously, there is some means of redress for the individual whose interests have been damaged.

Mr. Ian Bruce: I am not quite as relaxed as my hon. Friend the Member for Daventry (Mr. Boswell) about the purpose and detailed wording of new clauses 2 and 3. I am deeply troubled that, in about half an hour or so, we shall deliberate on some extremely important new clauses that have just been introduced to the House. They were not considered in detail in Committee. Lawyers outside this place have had far too little time in which to anticipate their likely effect. I am disturbed that the civil liberties lobby—if we may so describe people who work on civil liberties—has probably not addressed itself to what the new clauses do.
You, Mr. Deputy Speaker, will know that the Government, in proposing a National Minimum Wage Bill, have regularly demonstrated that they want to ensure that employers—not the taxpayer—pay their employees. The Government want to ensure that people receive an adequate wage, so that it need not be topped up using housing benefit or income support. That is why the wording of these clauses is so important.
I wonder why the words
civil or criminal proceedings relating to this Act
have been used instead of civil or criminal proceedings "taken under" this Act. The wording is extremely important, because of the way in which the Bill could be used.
For example, a constituent who is trying to claim from his or her absent partner through the Child Support Agency, and who probably has good reason for doing so, might come to an hon. Member's surgery. The present wording gives that individual the right to demand that the agency asks for information about someone who claims to be earning a small amount of money, but surely must be getting the minimum wage, so that he or she can take action relating to the Bill to ensure that the person pays his or her full dues under the Child Support Act 1995.
What about an agency looking into housing benefit? Surely the same argument would apply. The Government have said that one of the purposes of this Bill is to reduce the amount of housing benefit that must be paid by the taxpayer. The Government want the individual to be paid a certain amount of money. Under this ill-debated and ill-considered clause, which has only just been sprung on the general public, a housing benefit office could look into a claim from an individual stating that he or she is paid £2 an hour because it seemed incorrect—the purpose of

the Bill is to ensure that people are paid the right amount of money—and ask for information. I hope that the Minister will reassure us that that could not happen.

Mr. Boswell: Has my hon. Friend thought of the recent case involving Marks and Spencer, which secured large damages because of the commercial damage done to it by allegations about a defective employment practice? The company was vindicated in court, but needed compensation for damage that had been done because the information had been made public.

Mr. Bruce: I recall that case; the damages were substantial. Marks and Spencer took action against the broadcasting company that had made and published the programme. I suspect that a company would not have the same right to damages against the Government—they always seem to be able to protect themselves.
That moves me swiftly on to another important point about the authorisation of the Secretary of State. When most people read those words, they will think that, when such information needs to be transferred from one agency to another, the Secretary of State and President of the Board of Trade will get the full file in her red box, telling her the circumstances and why the information has to be passed across, so that she can take a semi-judicial decision that it is a proper movement of that information. We know what the general public do not—that that terminology is meaningless. All it means is that it will be authorised by someone who authorised someone else who authorised someone and so forth all the way down the feeding chain until some junior civil servant can say, "I am authorised by the Secretary of State to ask for this information." It will go to another junior civil servant and the information will pass across.
I am reminded of an interesting story that I heard from the late Nick Ridley on this subject. He told the House—certainly the meeting that I was attending—that he had awoken one morning to find an important letter from the Department of the Environment among the post on his breakfast table. The letter said, "I am authorised by the Secretary of State for the Environment to inform you that your carriage gate has been listed." He was the Secretary of State for the Environment and he had no inkling that he was about to list his own arch.
Frankly, the fine words on this amendment paper are a con. They are an attempt to tell the public that it is all right and that information will be transferred only in the most extreme of circumstances because the Secretary of State herself—the President of the Board of Trade—has to authorise the transfer.

Mr. Bercow: My hon. Friend just provided the House with an illuminating example. May I draw his attention to another probably occasional but sinister circumstance that could arise? He referred to the exercise of discretion on the part of the President of the Board of Trade. Could the people who might leak information from time to time be not junior civil servants but senior spin doctors, briefing on their own account and without authority in such a way as to damage others? In those circumstances, would the Secretary of State take responsibility in the classic and, if I may say so, the Powellite sense of the term?

Mr. Bruce: We all doubt whether the Secretary of State would take responsibility. The Minister is an honourable


lady and one of the stars of the Administration—I hope that I do not damage her career by saying so—and she will take that matter on board. We are trying to put across an important point. Who exactly will authorise the transfer of the information? I suspect that it will be the most junior of junior clerks who will be authorised by the Secretary of State to transfer information whenever it must be got from one part of the Government organisation to another.

Mr. Boswell: It would be helpful if, through my hon. Friend, I might ask the Minister what grade of official would be required to authorise the transfer of information.

Mr. Bruce: I would certainly give way to the hon. Lady if she wished to intervene, as that would facilitate matters. It is clear that I shall have to go a little further to tempt her to decide that this matter is important enough for her to give us a proper answer.
The Data Protection Acts 1984 and 1988 and other legislation designed to protect people have often been used almost perversely to prevent people who need information, often for personal use, from misusing the powers available to them—it is the sort of thing that often happens within Departments. In a half-hour debate on a wet Monday—I am not sure whether it is wet; it is probably sunny outside—when the House is nearly empty, we are giving powers to the Secretary of State and the feeding chain all the way through the Department of Trade and Industry, and to the Department for Education and Employment, to allow officials simply to show a card saying, "I am authorised by the Secretary of State to get information you are holding in another agency and pass it across."
Often, it is convenient for Governments to trawl for information in other areas. That has been the case for a long time. Most of the Labour Members present when the Child Support Bill was debated were keen to tell us how the Child Support Agency would have the power to pull in information. That is important, and we should consider it.
I intervened on the Minister on the subject of data protection legislation. I know that she is knowledgeable in such matters. I think that she will be responsible, particularly on the information technology side, for looking into all the problems. She will know that the Data Protection Bill that is passing through the House has been driven by a new European directive.
I was not a member of the Standing Committee that considered this Bill. I come to it on a wet Monday. When I looked at it I thought, "Oh no! Surely not. Surely the Minister must know that German data protection legislation would not allow such a transfer of information—absolutely not." We are considering jurisdictional matters. After all, people working in the United Kingdom and paid by companies in Germany might be caught by the Bill, but that information could not be transferred.
The Minister may think that she will enjoy many powers under the Bill, but I suspect that, when the Data Protection Bill is enacted, she will find that other colleagues, possibly even officials working for the same Department, are working to prevent information being transferred between Departments. It is important that we find out what considerations there have been on how the Data Protection Bill will affect information.
The German system is simple. Any information that is given to someone for a specific purpose must not be given to anyone else for any other purpose, although that is a daft interpretation of the European Union directive. I suspect that, as soon as we think we can live with the new data protection legislation and make it workable, someone will—as has happened time and again—take the matter to the European Court and say, "Hang on a minute. I provided some information about what I was doing in my workplace." That person will claim certain rights under the European convention on everybody's rights, which the Government are incorporating into British law, and say that the information that he provided was transferred from one Department to another without his authorisation.
If information that has been given in good faith by an employer is transferred between agencies, it may be found that, under the new Data Protection Bill, the employee's rights have been trampled on.

Mr. Lansley: My hon. Friend is talking about the transfer of data between agencies and Departments, but a Government agency may acquire information for two different reasons and be required to keep the data separate. If the officers referred to in the Bill were acting for the Contributions Agency, for example, but were also required to deal with the national minimum wage, they would have two sets of data for two separate purposes. How will the Data Protection Bill affect how they use that information?

Mr. Bruce: Interestingly, people in business are absolutely barred under data protection legislation from transferring information—they could get into a lot of trouble. The Government say, "We're not a business and we are not out for profit. We are guardians of the public interest." They think, therefore, that they can trample on everyone's civil rights in all their other legislation.
On a wet Monday when there is hardly anyone in the House, the Government have introduced pages and pages of new clauses on how they will do away with people's rights. Information will be given to one Department for a particular purpose, but the Government will not prevent its being used for another purpose.
Many people say that, if people volunteer and receive a little money, they will not be charged under the Bill, so long as no one is taken to court and no information is passed on, as there has to be a complaint from the worker first. That is not so. The information will be gathered, and such working arrangements will become criminal. Workers will no longer be allowed to negotiate the pay they want—they will not be allowed to volunteer and receive a small amount of money. The Bill will make it illegal for employers to give a volunteer a little money out of the kindness of their hearts, even though the volunteer did not need it. It will force people to work for nothing if they have volunteered—unless they work for a minimum wage.
If the Government had introduced the two-clause Bill that we expected—a Bill that established a minimum wage at half male median earnings, to be increased over time to two-thirds median earnings through regulations—we could have understood where they were coming from, as that was their commitment. However, they have


introduced a Bill which, not including all the new clauses, stretches to some 40 pages. We ask what the minimum wage will be, but it is not in the Bill—we cannot find it. We have all this complicated stuff—

Mr. Deputy Speaker (Mr. Michael Lord): Order. This is not a Second Reading debate. The hon. Gentleman must speak to the new clause.

Mr. Bruce: I was about to say that the Government have tabled all these new clauses and amendments, which the House is expected to take on trust. I hope that the Minister can show that she understands that
proceedings relating to this Act
does not mean proceedings taken under this Act.

Mr. Lansley: Does my hon. Friend recognise that industry wants the compliance costs to be minimal? In some ways, industry might find it helpful if a body such as the Contributions Agency deals with the minimum wage as well as national insurance contributions. That is not possible at the moment, because the Government have not made up their mind which body should carry out those duties.

Mr. Bruce: That is an important point. Employers would welcome a single agency that dealt with everything—minimum wage, national insurance contributions, tax or whatever—and had one set of records. In fact, people could be prosecuted if information about them contained a mistake—the wrong figure in the wrong place—as all the agencies will be passing information between themselves. The costs of checking will be considerable.
If the Labour party really believed in its proposals, it would have introduced a two-clause Bill. Instead, the Government have sprung on the House, at this late hour, an enormous muddle with no real discussion. I know that even the Conservative Whips want me to sit down and say almost nothing, but I am trying to help the House to make progress. The Government want to implement their minimum wage proposals—perhaps, if we stay up a little longer, they will tell us what the minimum wage will be, so that we can say, "That is great. We can all go home now."

Mr. Bercow: I fear that my hon. Friend's last point is a triumph of optimism over experience, which leads me to ask where he saw those flying pigs.

Mr. Bruce: The hon. Gentleman makes his point far better than I could. I am an eternal optimist—that is why I am speaking to the new clause. I have the greatest respect and even fondness for the Minister, so I hope that she will make some real, positive efforts. I had to compliment her on bringing forward clear policies on information technology, but the ones that we are discussing now are not clear. They have been bounced on her by her officials—who are looking very amused—as they, not the Secretary of State, will be authorised to grab all the information; if their wives or husbands have disappeared, they will have access to all that information

to find out where they are. The civil liberties lobby should examine the matter and the Government should put it out to proper consultation. We should reject the new clause.

Mr. Hammond: Many of the points that I wanted to make have already been raised by my hon. Friends, so we shall be able to proceed a little more speedily. However, there are still some outstanding matters that I want to raise.
One of the concerns that we expressed in Committee on record keeping and the passage of information related to the lack of symmetry between the requirement on an employer to maintain records that would be necessary to bring a prosecution under the Bill—and the penalties that he would suffer if he failed in that duty—and the lack of any requirement on a worker to keep relevant records.
It might at first glance seem that it is clearly the employer's responsibility to keep records, and in the case of most conventional employment, with the employee clocking on and off at the factory door, that is indeed so; but we agreed in Committee at an early stage that the problem areas that were likely to exercise officers appointed under the legislation concerned not such simple cases of traditional employment but, for example, piece work done by home workers.
Records kept by the home worker himself or herself will be essential to determine whether the minimum wage has been properly paid. The employer will have no way of knowing how many hours the home worker has put in. Following our discussions in Committee, I had hoped that the Government would introduce some changes to create a symmetry of obligation between employers and workers.
I am genuinely confused about another issue. Subsection (2) of the new clause says:
Information to which this section applies vests in the Secretary of State.
I think that I understand what that means, but in almost all cases, the information in question will be held by an employer and transferred in its entirety to the Secretary of State. I imagine that the Secretary of State will have an exact copy of the employer's wages records, for example.
It is not clear from the wording of the new clause whether it is intended that the Secretary of State should have some ownership in the information that has passed via her officer to the Department of Trade and Industry, as distinct from the employer's original ownership in the information that he collated and maintained in his database. Can ownership of a record vest in two people; or must it, by vesting in the Secretary of State, have ceased to vest in the employer?
I repeat a plaintive cry that was often heard in Committee: I am not a lawyer. My understanding of these matters is only that of an informed—I hope—layman. The Minister is a lawyer, and will have a much clearer understanding of this rather technical issue.

Mr. Bercow: The question of ownership is crucial. If my hon. Friend is right, and the President of the Board of Trade becomes the exclusive owner of the information, what is there to prevent a future Parliament from amending the legislation to enable that information to be released to other bodies or persons for purposes unrelated to the enforcement of the national minimum wage?

Mr. Hammond: The possibilities are endless if the intention is that the Secretary of State should become


the owner of the information. I accept that it would normally be unexceptionable for the Secretary of State to be the owner of information that his or her officers have gathered, but in this case, as I think the Minister would agree, the information is almost certainly a direct copy from the employer's records.
Who will own the information? Is there a distinction between owning the information passed to the DTI and owning the original information? What are the implications of the information vesting in the Secretary of State in terms of authorisation of its release? For example, would the original employer retain any rights to authorise the use of the data or their release to other parties? There may be a simple explanation, and if so, I look forward to hearing it.
I, too, have reservations about the possible implications under data protection legislation, but I think that my hon. Friend the Member for South Dorset (Mr. Bruce) has covered that point adequately. I hope that the Minister will be able to reassure us both.
Can the Minister confirm that subsection (6) of the new clause would prevent the Secretary of State not only from transferring the information elsewhere, for purposes unconnected with the minimum wage, but from using it for such purposes within the Department? If she can, that would at least be reassuring as a statement of intent; but, in view of the Government's lamentable record in maintaining the English walls around their information, I am not entirely sure that the Chinese wall that we are invited to imagine being constructed within the DTI would give us as much reassurance as we would really like.

Judy Mallaber: I hesitate to prolong the debate. The contribution of the hon. Member for Runnymede and Weybridge (Mr. Hammond) was slightly more to the point, but that of the hon. Member for South Dorset (Mr. Bruce) was nit-picking in the extreme. We are clearly being invited to stay here all night, and Government Members are entirely happy to do that.
Anyone would think that such a situation had never arisen before, but plenty of legislation has been enacted in which there has been a crossover of information. An example of such legislation received Royal Assent just months before the Conservative party went into opposition: the Social Security Administration (Fraud) Act 1997. Under that Act, there was a crossover of information between the Inland Revenue and Customs and Excise for the purpose of checking the accuracy of information relating to benefits contributions or national insurance numbers.

Mr. Lansley: Will the hon. Lady give way?

Judy Mallaber: No, I want to make progress.
Such a crossover is fairly common. It is nothing new.

Mr. Ian Bruce: Will the hon. Lady give way, as she mentioned me?

Judy Mallaber: Very well.

Mr. Bruce: I am grateful to the hon. Lady, but I think that she has been taken in by the Labour party's

propaganda. We are not an arrogant party. We know the problems that such transfers have caused in the past. We have never before managed to get the introduction of such new powers right with only 10 minutes' discussion.

Judy Mallaber: I am not sure whether there is anything for me to reply to in that intervention.
When we were discussing in Committee the need for a single minimum rate, I spoke of the need for simplicity and clarity, to prevent us from having a plethora of enforcement procedures, with masses of inspectors and cumbersome policing mechanisms; but we also need effective implementation, which will be impossible if information is coming in from different sources.
It is not surprising that we have not yet laid out fully who will be responsible for enforcement, because that will need to be done by different agencies for different purposes. We need to be able to bring the information together.

Mr. Lansley: Will the hon. Lady give way?

Judy Mallaber: No, I will not give way again, as I want to make some progress.
In police series, it may make for wonderful television to have different parts of the force hiding information from one another, with secrecies and jealousies, but that does not work very well in real life. Different agencies will collect the information we need, and to have sensible enforcement, we must be able to pull it together. That is what we are determined to achieve.
New clause 2 is essential so that information can be passed from one agency to another. That is sensible and necessary if the legislation is to work properly. In Committee, Conservative Members made it clear that they disliked intensely the principle behind the Bill. They said that they could never agree about the morality of legislation to overcome the immorality of poverty pay.

Mr. Hammond: Will the hon. Lady give way?

Judy Mallaber: I wish to move on. I took many interventions in Committee, and I did not have anything to reply to after the intervention by the hon. Member for South Dorset.
We all know that Conservative Members are not happy with the principle of the Bill, because they do not want to get rid of poverty wages and they do not believe in our economic arguments. They did, at least, assure us in Committee that they sought to make the Bill work properly. New clause 2 is an essential part of the enforcement mechanism of the Bill, and we should agree it.

Mr. Lansley: I was prompted to contribute to the debate by a comment made by my hon. Friend the Member for South Dorset (Mr. Bruce), but having listened to the hon. Member for Amber Valley (Judy Mallaber), I must take up one or two issues. She asserted with great confidence that new clause 2 is an essential aspect of the enforcement mechanism of the Bill. It is surprising, therefore, with her membership of the Standing Committee and her knowledge of the Bill, that she did not table a suitable amendment in Committee. She did not say that something was missing from the Bill. She did not


say that she knew from her study of the social security administration legislation introduced before the election that a mechanism was needed to control the flow of information between Government Departments. She did not say that, because Ministers did not tell her to say that. Ministers seem to have recently discovered the need for such a mechanism, but I wonder how essential it is.
When the Minister replies, she should tell us which legislation would apply to the acquisition and control of information by Government Departments in pursuance of the provisions of the Bill if new clause 2 were not agreed. I suspect that some perfectly good legislation might apply to the Bill. My hon. Friend the Member for South Dorset made an interesting reference to that point. [HON. MEMBERS: "Where is he?"] He will be back with us and he will read the report of the debate. Legislation exists to govern the control of information by Government Departments.

Mr. Boswell: Does my hon. Friend agree that it would be possible in principle to designate, for example, an agricultural wages inspector as an officer under clause 13 of the Bill for the purposes of the national minimum wage? Once such a designation had taken place, the transfer of information would be easier.

Mr. Lansley: Yes, it would. However, I am not sure how that would help, because the agricultural wages inspectorate could not be responsible for the entire enforcement procedure across other industries. We must still address the problem caused by the fact that more than one agency will be involved.
We all approach new clause 2 with some humility, because we have not been supplied with notes on clauses, as we were in Committee when they gave us information about the structure of clauses and their purpose before we began our debate. Without new clause 2, adequate legislation would still exist to ensure that Government agencies, which had acquired information for whatever purpose, should not use it for another purpose and should not transfer it to another Government agency. Therefore, why have the Government tabled new clause 2?
The answer may lie in a comment made by the hon. Member for Amber Valley when she mentioned the involvement of more than one agency. Although it would appear that the whole exercise could be accomplished by one agency—for example, the Contributions Agency, which has a wide remit and relates to everyone who would be covered by the national minimum wage—I suspect that it would be convenient for more than one agency to be used. For example, as my hon. Friend the Member for Daventry (Mr. Boswell) pointed out, the agricultural wages inspectorate would seem the logical choice for scrutiny and enforcement of the minimum wage in agriculture.
If more than one agency were involved in enforcement, information would have to be exchanged between the different agencies and Government bodies. I suspect that the existing legislation is restrictive and that the transfer of information about the national minimum wage between different agencies may be difficult to accomplish without specific legislation to allow it. New clause 2 will enable the Government to set aside the more restrictive existing legislation and to choose the appropriate agency to pursue information.
Far from new clause 2 meaning stricter enforcement, it is a device to suit the Government's intentions. I make that claim because the hon. Member for Amber Valley mentioned previous legislation and gave as an example legislation on social security administration and the elimination of fraud. She thus illustrated the problem—in previous legislation, Governments rightly referred to specific agencies that had a specific power to transfer between themselves information about their specific responsibilities. The Government have failed to reveal which officers in which agencies will be appointed to be responsible for the enforcement of the national minimum wage. Will it be the Contributions Agency, the agricultural wages inspectorate, the Inland Revenue, Customs and Excise or some other body, or will officers be appointed for that purpose alone?
New clause 2 is a consequence of the Government's failure to specify which officers and which agencies will be responsible for the enforcement of the Bill. That is why the Government will give themselves a wider power than has been enacted in previous legislation. That is a cause for concern, because the civil libertarian anxiety is that Government agencies that are only tangentially related to the purpose of the Bill may acquire some trivial information and use it for their wider purposes. I am sure that that is not what is intended by new clause 2, but that is the civil libertarian concern. To remove that concern, the Government must be explicit about who will get the data and for what purpose.

Mr. Ian Bruce: if the Government wanted a Bill that allowed them to transfer information because they were going to take proceedings under it, they would specify "proceedings taken under the Act", instead of "relating to the Act". The Government are giving themselves power to take criminal proceedings against persons on anything to do with wages or income, and not only on the national minimum wage.

Mr. Lansley: My hon. Friend is testing my ingenuity on the reason behind new clause 2. I shall not attempt to answer that intervention, but shall leave it for the Minister when she winds up.
I wish to raise a second point, which was my original purpose in seeking to contribute to the debate. My speech thus far was prompted by the contribution by the hon. Member for Amber Valley, which shows the value of contributions by Government Back Benchers. Even if we do not agree with them, we are prompted to cover points more adequately. Earlier, the Minister of State made it clear that many of the changes to the Bill that had not previously been contemplated by the Government were prompted by the need to bring it into line with other legislation. I wonder whether this is such a case.
How does the Minister foresee the interplay between the new clause and the prospective freedom of information legislation, which has an impact rather different from the data protection legislation to which my hon. Friend the Member for South Dorset referred? If such information is to be passed between public bodies, and hence out of the private domain and into the domain of the public sector—not into the public domain as such—it raises the question, in respect of information held by Government bodies to which freedom of information legislation will apply, of the extent to which the


legislation will allow access to the information; I hope that it will be not at the level of the individual, but at the level of the firm, industry or sector.
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Will the structure of the new clause, perhaps inadvertently, act as a constraint on the use of information? What would happen if the Government wanted to publish the data relating to the take-up of the minimum wage and the relationship between wages and the level of the minimum wage? There will be considerable academic as well as industrial interest in the application of a national minimum wage to an economy that has not hitherto been subject to one to anything like the same extent.
To what extent will Ministers be able to supply, or be constrained from supplying, information at industrial, sectoral or regional level by aggregating data acquired for the purposes of the national minimum wage? If the Government collect and publish information in aggregate, will it be passed outside Departments and into the public domain? That is not, on the face of it, contemplated under the new clause. Can the Minister refer us to some saving measure to show that there is no constraint on the publication of data aggregated for the purpose of elaborating the impact of the national minimum wage?

Mr. Bercow: I am moved to comment principally by the contribution of the hon. Member for Amber Valley (Judy Mallaber). It would be an understatement to say that I was saddened and disappointed by her speech. We spent many hours in Committee debating important matters. I hope that she will not take it amiss if I say that she made some of the most thoughtful contributions.
It is in no spirit of hostility that I observe that I was struck by the inadequacy of the hon. Lady's reasoning in backing the Government. In a fit of what looked and sounded like irritation, she said that new clause 2 was essential for the implementation and effective enforcement of the national minimum wage. With that throwaway line, she seemed to suggest that she had obviated the need for further rational argument about the merits of new clause 2, on which several of my hon. Friends made important comments. In short, she appeared to suggest that the ends justify the means. She had not even thought of the need for it, but now she prays in aid her wisdom on the subject. She said nothing about the information provisions previously, but she is now satisfied with what the Government propose. We have several legitimate and serious objections, to which it would be nice to think that the Minister will feel obliged to respond.
As my hon. Friends have made several important points, I shall confine myself to two. The first relates to new clause 2(5), which specifies that information supplied under subsection (4)
shall not be supplied by the recipient to any other person or body unless it is supplied for the purposes of any civil or criminal proceedings relating to this Act".
That is as may be, but it is not clear what recourse or redress employers have in the event that information supplied to the Secretary of State or another relevant authority is leaked to another relevant authority or, worse, into the public domain, with or without the authorisation of the Secretary of State, maliciously or non-maliciously.
I hope that the Minister for Small Firms, Trade and Industry will be able to tell me that I have no cause for concern and that employers in such circumstances will have redress and be able to go to law; that a remedy will be available to them. She is a decent and civilised human being and an effective exponent of the Government's case. She is also a lawyer and knows the importance of rights of redress for those whose rights have been infringed.
My question does not require elaboration. If an employer suffers from the release into the public domain or to another relevant authority information that is damaging to his business or him individually and that release is improper, unauthorised or even malicious, will he be able to secure some redress, compensation or recognition of the fact of wrongdoing by the Government Department or other relevant authority or whoever?

Mr. Hammond: I have listened carefully to my hon. Friend's argument. It is a question not only of the Government Department, other relevant department or whoever, but whether an injured party would have redress against the recipient who had leaked the information and whether, separately, he would have redress against a Secretary of State who had originally made the information available.

Mr. Bercow: My hon. Friend makes a powerful point. It is of the essence that an employer who has been offended against in such a way should have a right of redress against the Secretary of State, even if the Secretary of State himself or herself had not authorised the release of the information. If the Secretary of State had authorised the information, albeit with no malicious intent, there has ultimately to be an acceptance of responsibility. Nowhere is it more appropriate in the implementation of legislation than in such cases that the Secretary of State should take responsibility. Whether it is a junior departmental official or a senior spin doctor, deliberately or accidentally, with or without authority, ultimately an individual should have redress. The Secretary of State should be held accountable for the inappropriate conduct.
My hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) also raised the important question of the entitlement of the employer who has been offended against to secure redress from others to whom the information has been leaked. Morally, the employer offended against should be so entitled, but, practically, it is doubtful whether it would be possible to secure such redress.
I mentioned, among others, the scenario of the release of information into the public domain. In referring to the public domain, I refer to the likelihood of the information appearing in the media. It is then potentially in the minds of hundreds of thousands, if not tens of millions, of people. It seems improbable that the wronged, possibly aggrieved, employer would be able to secure redress against millions of people, although his grievance would be none the less serious for that.

Mr. Hammond: It occurs to me that, although the new clause creates an absolute prohibition on a party who has received information from the Secretary of State passing it on for purposes other than those relating to the Act, it says nothing about the sanction to which such a person would be subject. Might it not be better if the Secretary


of State, when making such information available, entered into a restrictive agreement—a contractual arrangement—which might stipulate entitlement to monetary or liquidated damages if the information was passed into the wrong hands, thus making it a matter of contract between the Secretary of State and the recipient if anything went wrong?

Mr. Bercow: My hon. Friend is making a worthy attempt, albeit relatively late in the day, to improve the likely consequences of the legislation. However, I am sure that he agrees that it would be preferable that, rather than facilitating such contracts in future, the Bill itself were amended specifically to provide for redress in the circumstances I have described or in similar circumstances. It should not be necessary for the Secretary of State subsequently to have to enter into particular contractual arrangements with others to whom she passes the information acquired. It ought to be stated on the face of the Bill that there is a prohibition on the release of the information to third parties, and that there is a sanction in the event of that release of information.

Mr. Ian Bruce: Despite the fear that I shall again be described as nit-picking, I should like to comment on the fact that, having received information from the Secretary of State, one is able to pass it on for the purpose of any civil proceedings. In the English language, civil proceedings do not necessarily take place in front of a court. When reading the phrase "civil or criminal proceedings", one tends to think that they will take place in a courtroom, but one can argue that a solicitor having been given the information and then selling it for a profit to a trade union with an interest in the legislation is "civil proceedings".

Mr. Bercow: I am exceptionally grateful to my hon. Friend, because he has picked a useful nit—indeed, his reputation for doing so is legendary and entirely justified. There is a danger of the information being used in that way, and if, as is possible, the Minister thinks that it is unlikely to arise, I should be grateful if she would explain why. More particularly, I should appreciate her saying what she would think of a circumstance of the sort my hon. Friend describes. Does she believe, as I suspect some Government supporters do, that that is simply an unfortunate but acceptable by-product of a worthy piece of legislation?
I should be saddened if the Minister took that view, because she does not have the gaze of the fanatic about her. That is not a comment I could make of several of her right hon. and hon. Friends, who undoubtedly think that all is justified in the service of the wider goal of the national minimum wage. We are concerned with the respect for rights and, in so far as rights are not safeguarded on the face of the Bill, does the Minister accept that there will be people genuinely concerned about the possibility of abuse? I hope that she does accept that and that she will respond to the point.
I should say that, in respect of the Minister, to whom legislation does not refer—it refers, quite properly, to the Secretary of State—I have no qualms, concerns or anxiety at all. I do not wish to drive any more nails into her political coffin, but I regard her as a person of the utmost

propriety and integrity. I am not even concerned about the way in which the current President of the Board of Trade might use the information. However, more dastardly figures might arise in future who would use and abuse the information for malign purposes, the effect of which would be to damage individual employers.
The second feature of the new clause to which I want to refer is subsection (6), which states:
This section does not limit the circumstances in which information may be supplied or used apart from this section.
It is precisely the vagueness and ambiguity of that terminology which gives me cause for concern, and I invite the House to consider the possibility that it lays us open to an abuse. If there are Labour Members, other than those sitting on the Treasury Bench, who know precisely what is to be interpreted by those words and who are able now, via an intervention, to disarm me and to demonstrate beyond peradventure that subsection (6) is entirely innocuous, I shall be happy to hear from them.
It would not be reasonable for those sitting on the Treasury Bench to rise to defend subsection (6), for, if they do so, all the Labour Back Benchers will sheepishly follow their lead and profess that, although they are most grateful to their hon. Friend the Minister for explaining matters for the benefit of me and my right hon. and hon. Friends, they knew that information anyway and were always aware that it was a perfectly satisfactory and harmless subsection. I issue an invitation to a Labour Back Bencher to state explicitly what subsection (6) means—that is the first challenge; the second is to explain why that subsection is innocuous and why I have no grounds for fearing its possible abuse, to the detriment of perfectly decent people in future.
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I am veritably staggered—nay, I would be veritably staggered, were it not for experience of Labour Back Benchers—to discover this sudden reticence by which they have been afflicted. At the very moment that I hoped a Labour Back Bencher—I notice some experienced Members among those present—might spring to his or her feet to reassure me what an innocuous subsection subsection (6) is, none of them chooses to do so. All refrain from doing so: they remain seated; they have nothing to say; they are duly embarrassed; they are unable to offer a defence of, or to give their explicit and vocal support for, subsection (6). On the basis of their reticence, I am even more concerned now than I was before I issued the invitation.
I repeat, for the benefit of Labour Members, that subsection (6) states:
This section does not limit the circumstances in which information may be supplied or used apart from this section.
I give the House one illustration of a scenario in which the information may be used for purposes unrelated to the purposes of the clause, and I invite Labour Members to respond to this scenario. I am not saying that the scenario is bound to occur, or that it is even probable that it will occur; I simply submit for the consideration of the House the possibility that it might occur, and I invite Labour Members to comment.
The scenario is this: wholly unrelated to the implementation of the provisions of the National Minimum Wage Act, as the Bill will shortly become,


Ministers of the Crown, for the purposes of what might be described as a name-and-shame policy, choose to release to other relevant authorities or even into the public domain, or allow to be released into the public domain by junior officials or indeed senior spin doctors, information about the employment and wage-paying practices of particular companies. That is potentially a purpose for which subsection (6) could be used; the subsection entitles the use of information for purposes other than those provided for in the clause.

Mr. Hammond: I have been following closely my hon. Friend's interesting and detailed argument; his point may be even stronger than he realises, in that subsection (3) would appear specifically to authorise the Secretary of State to use the information for that purpose, it being a purpose relating to the Act—it does not require the purpose to relate to proceedings or a prosecution under the Act, but merely that the purpose should relate to the Act.

Mr. Bercow: I am grateful to my hon. Friend. As he was intervening, I looked at subsection (3) again, and I am happy to concede that he could be right. As my hon. Friend would expect, I was erring on the side of generosity and I had not focused on the words "relating to this Act" as intently as my hon. Friend the Member for South Dorset (Mr. Bruce) had done. I had slipped into what was probably the error of thinking that the words "relating to this Act" were innocuous. My hon. Friend the Member for South Dorset has already explained why they might very well not be innocuous and could be used and abused for malign purposes by people acting under the authority of the Act.

Mr. Ian Bruce: May I let the House into a little secret? I knew an investigative journalist who, a few years ago, was attempting to embarrass the Labour party by finding out how much each Labour Member was paying his or her research assistant, as it was general knowledge that people volunteered and worked for peanuts. The journalist could not discover the information in sufficient detail to publish it, but, under the Act, inspectors could release that information to journalists because it relates to the Act.

Mr. Bercow: If ever there were a good reason for the Government to reconsider their position and recognise the dangers of the existing wording of the clause, my hon. Friend has, in a thoroughly charitable fashion, provided it. I might have hoped that the cause of the national interest, the merits of the case for individual companies and the simple issue of natural justice would cause the Government to rethink, but we are dealing with new Labour, and it is over-optimistic to expect those virtues to come to the fore.
I note that seated at the back of the Chamber are two hon. Ladies—the hon. Members for Preston (Audrey Wise) and for Birmingham, Selly Oak (Dr. Jones)—who are definitely not members of new Labour. It may be that, in relation to the new clause, those hon. Ladies' natural sense of fair play, their preoccupation with justice and the cause of individual and civil rights will come to the fore. Perhaps, when I have concluded my observations, one of them will enthusiastically rise to her feet to agree with what I have said.
My hon. Friend the Member for South Dorset must understand that the Government will not be motivated to shift in our direction for any reason other than self-

interest. The prospect that the policies that Labour Members, and perhaps even Labour Ministers, use to pay their own researchers could cease to be a closely guarded secret and could, instead, be dangerously released into the public domain and covered by national newspapers should give them pause for thought.
My anxiety has been simply stated. I fear that subsection (6) and, possibly, as I happily concede to my hon. Friend the Member for Runnymede and Weybridge, subsection (3) could be used for propaganda purposes, which would damage particular companies, entrepreneurs and individual business men who might have fallen foul of the lieutenants of new Labour. That is particularly serious, because information could be released into the public domain that not only damaged certain employers, but did so wrongfully.

Mr. Lansley: I am grateful to my hon. Friend, and I hope that he will forgive me if I anticipate a point that he is about to make. We need to know from the Minister whether the Government intend to publish data specifically relating to employers to whom enforcement notices have been issued, because, under the Act, such notices may be issued without the employers having any right to make representations.

Mr. Bercow: My hon. Friend makes a valid point, and I hope that the Ministers present will heed it.

Mr. Hammond: Further to the intervention of my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), it strikes me that the information would not even be subject to the limited safeguards of the new clause, because the information would not have been obtained by an officer, but would have come from the officer's own records, which he had created in the course of his duties. Therefore, there would be no protection.

Mr. Bercow: My hon. Friend makes an equally valid point. The danger is that information will be released into the public domain that wrongfully damages particular employers. That might happen because the information about, for example, enforcement notices or penalty notices is incorrect. The possibility of error exists—Ministers have acknowledged that in providing for defences in the context of enforcement notices and penalty notices—

Mr. Lansley: But not in respect of themselves.

Mr. Bercow: My hon. Friend wryly observes that, although Ministers have acknowledged the possibility of error, they have not done so in respect of themselves. He makes a fair point. In fairness, Ministers have acknowledged the possibility of error in respect of an officer issuing an enforcement notice or a penalty notice. The information may be incorrect and, subsequently, it may be successfully contested by an employer. If it is, it will be clear beyond doubt that the information was wrong and that the enforcement or penalty notice should not have been issued.
If, however, acting under subsection (6), the information that has been compiled is used for a purpose unrelated to the Act, before the employer has had the opportunity to clear his name and demonstrate that the enforcement or penalty notice should not have been issued, the damage will have been done. That is why I


ask the Minister, in all sincerity, whether she accepts the possibility—not the probability or the likelihood—of abuse.

Mr. Syms: There is also the issue whether the enforcement notice is a private matter between the officer and the company—and therefore open to negotiation or the free flow of information—or a public notice, in which case the employer may well be condemned without having done anything wrong.

Mr. Bercow: What might start as a private notice could cease to be private after a short period. In Standing Committee, I raised the possibility of information being leaked, perhaps to people with a vested interest in its use, not just to Joe Bloggs who is wholly uninterested in the circumstances. The information could be leaked—either deliberately or accidentally—to somebody with a vested interest in doing down a business rival. The circumstance to which my hon. Friend referred is perfectly capable of arising and, if it did, it would be extremely serious.

Mr. Hammond: Will my hon. Friend acknowledge that a particular circumstance has been of concern to Conservative Members throughout the Bill's consideration? It would arise when an employer failed to pay any wages and, under the legislation, enforcement proceedings were taken because that failure constituted, as it certainly would, a failure to pay the minimum wage. Failure to pay wages could signal that something was wrong in the business and that information could be of great value to competitors. Does my hon. Friend agree that, in those circumstances, employers would be right to be concerned about the possible leakage of such information into the public domain?

Mr. Bercow: In such circumstances, the release of information would be damaging and unfair in equal measure. If a company were in the gravest difficulty and had not paid the minimum wage simply because a cash flow crisis prevented it from doing so, it would be serious if those difficulties were compounded by the release of information into the public domain, possibly for use against the company by a business rival.
I conclude by asking the Minister for Small Firms, Trade and Industry—as I have already done a number of times during my speech, eloquently aided and abetted by my hon. Friends—the following question: what is the redress? She is a courteous debater, and I hope that she accepts that in no sense are we seeking to frustrate progress on the Bill by discussing these important issues. The Minister of State is always good fun and good sport, but he has a rather nagging and downmarket tendency to resort to his usual attack that we are making these points just to stop the Bill.
In full view of hon. Members on both sides of the House, I say to the Under-Secretary, graciously and without hint of grudge, that she will get her Bill. I wish to ensure that people do not suffer as a result of the inappropriate exercise of power, which is a legitimate anxiety and a proper preoccupation of hon. Members, whatever their political affiliation. I should be most grateful for the Under-Secretary's response to the points that I have made.

Mrs. Roche: This has been an amazing, surreal debate. It started well; the hon. Member for Daventry (Mr. Boswell) was so reasonable and made a good response to my opening remarks. I thought that I had been reasonable in my opening remarks, but I have learnt my lesson. I thank Conservative Members for their great contribution to my parliamentary reputation among my colleagues. I am not sure what sort of service they have done me—

Mr. Ian McCartney: We do not believe them.

Mrs. Roche: I am grateful to my hon. Friend for that comment; I must be doing all right.
I agree with the hon. Member for Daventry that, as I said earlier, a balance must be struck between confidentiality and ensuring that the enforcement procedure is right. We want to ensure that the procedure is right; representations were made on that point by hon. Members on both sides in Committee. We started from the premise that the great majority of employers would want to enforce the Bill, and that proper procedures would have to be put in place to ensure such enforcement and to ensure that there would be no abuses.
I shall deal with points that were pertinent to the new clause and the amendments. Hon. Members mentioned unauthorised and improper disclosures. Improper disclosures by Government Departments will be dealt with in the strongest possible terms under internal disciplinary procedures. The previous Government rightly put in place procedures to deal with improper disclosure of information that employers must lodge with the Government, and exactly the same procedures will apply under the Bill.
The hon. Member for Daventry, who is not in his place, asked an interesting question about court proceedings. The hon. Member for South Dorset (Mr. Bruce) asked about civil proceedings—a narrow phrase which covers proceedings that are related to enforcement rights under the Act.

Mr. Ian Bruce: The Under-Secretary used the words that I wanted to hear. Why does the new clause use the words "relating to this Act", and not "under the Act"? Those phrases are so different.

Mrs. Roche: I do not see any difference—it is a term of art—and I assure the hon. Gentleman that he should see no sinister purpose whatever.
The hon. Members for South Dorset and for Daventry asked about misuse of information by the recipient. The normal injunction procedure, which is well known, should usually prevent misuse of information. Information given in open court may already be in the public domain. In that regard, the Bill does not differ from previous legislation.

Mr. Lansley: My hon. Friend the Member for South Dorset questioned me about the words "under the Act" and "relating to this Act", and I have been thinking about that question since he asked it. The Bill will amend legislation such as the Agricultural Wages Act 1948, the Employment Rights Act 1996 and other legislation. Will proceedings take place under the amended legislation and not under the Act, although they will relate to the Act?

Mrs. Roche: The hon. Gentleman was a member of the Standing Committee. He will be aware that the Bill


amends other legislation to ensure that the legislation is coherent and consistent. The Bill has been drafted carefully to cover proceedings that are related to the Act. There will be two parallel systems, one of which will deal with agricultural wages legislation. The Bill is consistent on that matter.
My hon. Friend the Member for Amber Valley (Judy Mallaber) made an important point and greatly assisted our deliberations. She pointed out that the Conservative Government enacted legislation to make such exchanges of information possible. I did not read press reports of great rebellions by Conservative Members when that was taking place.

Mr. Lansley: rose—

Mrs. Roche: No, I will not give way; I must make progress.
The hon. Member for South Dorset made a remark with which 1 must take issue straight away. He said that officials were looking amused. Hon. Members well know that officials are never amused; they are absolutely correct at all times.
The hon. Member for South Dorset asked about the grade of officials who will make decisions about vesting authority and about authorising officials to act. As with all other legislation, under the Bill—the hon. Gentleman agreed with this—decisions will be made by officials of the appropriate grade.

Mr. Ian Bruce: The Under-Secretary is a friendly boss, which is why she amuses her civil servants, but is it not important to discover whether decisions will be made at an operational level, at which point the person who collects information is authorised by the Secretary of State to pass it on to anybody else, or at a more senior grade? Someone of an appropriate grade may be at the lowest level, as the Under-Secretary has said.

Mrs. Roche: I hope that the hon. Gentleman accepts—I am choosing my words carefully—that appropriate level means exactly that. Sensitive information has to be dealt with properly. The new clause is narrowly drawn. I assure the hon. Gentleman that we want the matter to be dealt with in a way that is good for the employer and for the employee.
The hon. Member for South Dorset also mentioned the Child Support Agency and in-work benefits. Tempted though I am to discuss them, I feel that you, Mr. Deputy Speaker, would stop me if I did so.
The hon. Member for Runnymede and Weybridge (Mr. Hammond) asked about information, the use of the word "vests" and ownership. The intention is that information obtained by officials for the purpose of the Act should be treated as held by the Secretary of State. No other effect is intended. The information will not cease to vest with the employer; it could not do so, because the employer would still own the original information. The wording is drawn narrowly because information about sensitive matters is being passed.

Mr. Bercow: Will the Minister give way?

Mrs. Roche: No, I must make progress.
The hon. Member for South Cambridgeshire (Mr. Lansley) asked about the purpose of the clauses. They are meant to clarify the enforcement provisions. As I said when I spoke earlier about the contribution by my hon. Friend the Member for Amber Valley, the model for the provisions is the arrangement in the Social Security Administration (Fraud) Act 1997, which was passed by the previous Administration. They managed to make a contribution to our deliberations on the Bill.

Mr. Lansley: Does the Minister accept that the example that she has given specified the agencies that were to collect information on behalf of the Government and the other agencies to which information should be passed? It is specific, not general.

Mrs. Roche: I said when I spoke to the new clauses and the amendments that they were contingency measures because we are waiting for the recommendations on enforcement by the Low Pay Commission. There is nothing sinister in that. I am being frank with the House.
The new clauses and the amendments will assist in the enforcement of the Bill. The measure is warmly welcomed by the majority of hon. Members and by the country. It demands proper enforcement procedures, and I commend the new clauses and the amendments to the House.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New clause 3

INFORMATION OBTAINED BY AGRICULTURAL WAGES OFFICERS

'.—(1) This section applies to information which has been obtained by an officer acting for the purposes of any of the agricultural wages legislation and which is held by a relevant authority.

(2) Information to which this section applies may, with the authorisation of the relevant authority, be supplied to the Secretary of State for use for any purpose relating to this Act.

(3) Information supplied under subsection (2) above may be supplied by the recipient to any government department or other body if—

(a) arrangements made between the recipient and that department or body under section 13(1)(6) above are in force; and
(b) the information is supplied for any purpose relating to this Act.

(4) Except as provided by subsection (3) above, information supplied under subsection (2) or (3) above—

(a) shall not be supplied by the recipient to any other person or body unless it is supplied for the purposes of any civil or criminal proceedings relating to this Act; and
(b) shall not be supplied in those circumstances without the authorisation of the relevant authority.

(5) This section does not limit the circumstances in which information may be supplied or used apart from this section.

(6) In this section—
the agricultural wages legislation" means—

(a) the Agricultural Wages Act 1948;
(b) the Agricultural Wages (Scotland) Act 1949; and
(c) the Agricultural Wages (Regulation) (Northern Ireland) Order 1977;

relevant authority" means—

(a) in relation to information obtained by an officer acting in England, the Minister of Agriculture, Fisheries and Food;
(b) in relation to information obtained by an officer acting in Wales, the Minister of the Crown with the function of appointing officers under section 12 of the Agricultural Wages Act 1948 in relation to Wales;
(c) in relation to information obtained by an officer acting in Scotland, the Minister of the Crown with the function of appointing officers under section 12 of the Agricultural Wages (Scotland) Act 1949; and
(d) in relation to information obtained by an officer acting in Northern Ireland, the Department of Agriculture for Northern Ireland.'.—[Mr. Robert Ainsworth.]

Brought up, read the First and Second time, and added to the Bill.

New clause 4

COMPANY DIRECTORS

'.—A person who is a director of a limited company does not qualify for the national minimum wage in respect of that employment.'.—[Mr. Lansley.]

Brought up, and read the First time.

Mr. Lansley: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this, it will be convenient to discuss the following: New clause 5—Directors of companies—
'.—A person who is a director of a company is not entitled to the national minimum wage in respect of his or her employment by that company.'.

New clause 10—Exclusion of severely incapacitated persons—

'.—(1) The Secretary of State may, after consultation with the Low Pay Commission, make an order exempting incapacitated persons from the provisions of this Act.
(2) An order under subsection (1) above shall provide for the issue of permits by the Secretary of State to those persons whom he believes to be incapacitated and may make provision for—

(a) the procedure for applying for and issuing such permits;
(b) the procedure for establishing the minimum wage to which each permit holder shall be entitled (being less than the single hourly rate prescribed under section 1(3) of this Act);
(c) the appointment by the Secretary of State of suitably qualified persons to assess such applications; and
(d) the procedure for appealing against a refusal to issue such a permit

(3) No person shall be guilty of an offence under this Act in respect of an employee who holds a permit issued in accordance with an order made under this section.
(4) For the purposes of this section, a person is incapacitated if he is so affected by physical injury or mental deficiency or infirmity due to age or any other cause as to be incapable of earning the national minimum wage.'.

Amendment No. 70, in clause 1, page 1, line 14, leave out from `(c)' to end of line and add
'is over the age of 18 years'.

Amendment No. 79, in clause 3, page 2, line 42, leave out '26' and insert '18'

Government amendment No. 21.

Amendment No. 53, in clause 4, page 3, line 10 after `State', insert
`acting on the advice of the Low Pay Commission'.

Government amendment No. 22.

Amendment No. 54, in page 3, line 11 after `descriptions', insert 'or deleting existing descriptions.'

Government amendment No. 23.

Mr. Lansley: Hon. Members will note that the group includes some amendments and new clauses relating to different issues. New clause 4 directly reflects the substance of new clause 5, but is expressed slightly differently. I am sure that hon. Members will wish to elaborate on the new clause and the amendments.
The new clause seeks to exclude from qualifying for the national minimum wage those who are employed by companies of which they are directors. Its purpose is straightforward. It became abundantly clear in Committee that, elsewhere in the legislation, the Government took pains to assure the Committee that the Bill did not intend to treat as qualifying for the minimum wage people who were genuinely self-employed. I shall not enter into the debate about what constitutes genuine self-employment, because we have had several debates on that.
If it is agreed that the Government are right in their intention that self-employed people should not qualify for the minimum wage, it would serve us well to understand why. If people are employed, or are workers who have a contract with another person, the Government say that that person should be constrained to pay the national minimum wage. However, the Bill does not intend to constrain people to pay themselves the national minimum wage. There would be all kinds of absurdities and perversities if that were so. Self-employed people would have to pay themselves the minimum wage, although that might cause the business to fail or, in some curious way, they would have to treat the resources of the business as separate from their own resources. Those are strange outcomes, and in the context of the Bill it is right to exclude the self-employed from the national minimum wage.
7.45 pm
The argument proceeds directly to those who are directors of companies, in that, acting corporately, such people have the ability to determine their own pay. The new clause has been introduced with that in mind.
Speaking not legally but substantively, there are two kinds of directors, and we all recognise them in practice. There are directors of large companies and directors of small companies, and it may be argued that the former do not necessarily determine their own pay. It may be determined by a remuneration committee of the board of directors, which may include non-executive directors, and it could be said that executive directors might somehow run the risk of the corporate board paying them less than the national minimum wage. We should treat that as technically correct but substantively pointless, because the


majority of directors of large companies will be paid well in excess of the national minimum wage, and no benefit is served by seeking to ensure their inclusion in qualifying status.
Quite a different practice applies to the directors of smaller companies, who are much more numerous. They will determine what they are to be paid by the business of which they are directors.

Mr. Ian Bruce: I do not want to nit-pick, but I think that my hon. Friend is wrong in excluding that group. In a company in which a body of people decides a director's pay, the director may, because the company is doing badly, volunteer to take no pay that year. In that event, his company could be prosecuted because he was doing what Labour Members say fat cats should do when they do not make a profit, which is not to take any pay.

Mr. Lansley: In practice I do not think that we disagree on that. Whether the company is large or small, its directors have a responsibility to it. It is not simply that they may choose not to take a salary that is equivalent to the national minimum wage—which might apply in a small company in straitened circumstances—because, as directors, they may have a legal responsibility not to do so. For maintaining the company's business, it may be necessary for them not to extract profits and pay themselves salaries above a certain level in pursuance of their wider responsibility to the company as a corporate body.

Mr. Bercow: My hon. Friend's comments about the directors of small companies are especially pertinent in the light of the information that we discussed in Committee. My hon. Friend will recall that that information related to the evidence that the take-home pay of many small business men is lower than that of many of their staff.

Mr. Lansley: That is right, but I shall not replay the Committee debate on small businesses in general. Many of the arguments in that debate apply a fortiori to directors of small companies who determine their own pay. By incorporation and by becoming directors, they are often seeking to create a growing business. Often in those early years—I am reasonably familiar with it; I know that my right hon. and hon. Friends are at least as familiar with the process as I am—withdrawals from the business are necessarily very modest, and may at certain points fall below the national minimum wage level.
That is one reason why low-income statistics are often distorted to an extent by people who draw apparently very low incomes. They may, for example—I know this well from constituency experience, as other hon. Members will—have been in reasonably well-paid employment and have left it to start up their own business; they are either self-employed or they form their own company and are directors of that company. For some period, perhaps two or three years, they take virtually no income from that business, because they are establishing it.
Of course, perversely, those people appear in income statistics to have little income, but they have a certain amount of expenditure. Of course, that is because they are maintaining their expenditure out of assets—their personal assets, as it were—while the business is building up by virtue of theirdesire to turn it into a growing company.
The perversity of the Bill is that, at that moment, as directors of the company, their intentions may be frustrated by a legal obligation—regardless of their desire as directors—to withdraw money from the business to pay it to themselves as individuals. I will not elaborate, but I know from discussions with my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond), who will explain it better than I, that tax consequences may flow from an obligation to withdraw money out of a loss-making business to pay wages. From the tax point of view, it may be perverse to force directors to do that.
New clause 4 has been tabled in pursuance of the Government's aim in relation to the self-employed. [Interruption.] It is desirable in relation to small businesses, and it is particularly apposite in relation to company directors.

Mr. Ian Bruce: As my hon. Friend is concentrating so hard on his speech—and the examples that he has given have all applied to me personally—I wonder whether he heard Labour Members mutter and say that he was completely wrong. If the hon. Member for Chorley (Mr. Hoyle) does not believe us, I shall show him the accounts.

Mr. Lansley: My hon. Friend helps me, because I was concentrating on addressing my remarks to you, Mr. Deputy Speaker, and I was not able to pay attention to what was said by Labour Members, but everything that I have said has been directly borne out by the personal experience, if not my own, then that of persons I have met in my constituency or in my time as deputy director-general of the Association of British Chambers of Commerce, where I had the privilege to serve directly many people who had started a business, and had gone through precisely the processes that I have described, often deriding in the process the cosy analyses of Government Departments, of whatever political persuasion—before I am chided by Labour Members—for which the risk of failure is often measured in terms of being moved sideways to a different job. For a small business, the risk of failure is measured in terms of the loss of one's home, all one's security and much for which one might have worked for many years.

Mr. Syms: I am following my hon. Friend's arguments carefully, and he makes a persuasive point. Often a husband and wife start a small business. Both may be committed to it. One of them, sometimes the wife, who may do the book-keeping, may not derive a full salary, and that may cause a problem.

Mr. Lansley: My hon. Friend makes an interesting point. By virtue of an earlier new clause, the spouse of someone who is, let us say, the more active director in a small business that is starting up could hardly be treated as a volunteer in that business; the new clause would not allow such a thing. That person could not contract out of the national minimum wage, because a later clause in the Bill forbids it, so, although a company is required to have two directors, the second director may of necessity be treated as an employee or worker for the purposes of the legislation, and be paid a national minimum wage.
Then it becomes a question of record keeping and all that goes with it, even if the hours worked are deemed to be relatively few. Many people who are starting up small


businesses already feel that the burden of record-keeping to which they are required to pay attention is great. There will be a serious difficulty in terms of the constraints to pay those persons who are involved a particular withdrawal from the business and in terms of record keeping. However, incorporation itself brings all the disadvantages that are associated with having to make withdrawals from the business, to pay a certain wage, to keep records, which is perhaps at least as difficult, and to make returns on those records to an enforcement officer, who acts on behalf of the Secretary of State.
All that acts as a perverse disincentive to incorporation, when in recent years so much effort has gone into ensuring that business decisions are as much as possible taken for reasons associated with that business itself, rather than by virtue simply of the Government's actions. However, this is another set of actions by Government which may lead to an obstacle falling between a self-employed person or a sole trader acting in that capacity and someone who seeks corporate status.
Before others speak to it more expertly than I do, may I say that new clause 10 is well constructed, reflecting as it does the structure of the parallel provision within the agricultural wages board legislation. As I said only obliquely and briefly during the Standing Committee, I am aware of exactly the type of circumstances in which people with severe disabilities are encouraged to enter the workplace.
Absolutely nothing in new clause 10 is designed to frustrate that, but it makes different provisions—I know this from the Papworth hospital NHS trust in my constituency—about the mechanism by which remuneration is given to persons with severe disabilities, learning disabilities or incapacities, often of a physical nature, so that those persons still have a full incentive to enter work, rather than to remain wholly on benefits, and an incentive remains for the employer.
It would be disadvantageous if the Bill had no provision for permits of that type, acted as a disincentive to that happening, or interfered with the mechanism by which some of those arrangements to support disabled people into work occur. It may not necessarily be advantageous for the payments to be routed to the employer and then back to the individual through wages. It may sometimes be better for them to be made directly by a supporting body to the individual, while the employer pays a wage that is discounted by some factor in relation to an individual's incapacity.
In Standing Committee, Ministers were often at pains to emphasise the desire to have additional flexibility. Amendment No. 54 is designed to achieve exactly that purpose: to give Ministers the flexibility, using their power under clause 4, to add descriptions of persons who might be treated as not qualifying or for whom a different rate might be prescribed, and to delete descriptions of persons. I do not think that there is any particular agenda in mind in tabling amendment No. 54, but it is entirely laudable that the amendment gives Administrations, including futur Administrations, that flexibility.
Amendment No. 79 needs to be debated at some length. It seeks to remove the flexibility within the legislation to prescribe a different rate for persons aged over 18 and under 26. If one considers the Government's evidence to

the Low Pay Commission, one can see the direction in which the Government are moving. Clearly, they are looking towards treating those under the age of 26 as a reasonable proxy for those who are in training in one form or another.
The Government do not want a separate training rate, which is much sought by business, for good reason. They hope that, instead of having all the difficulties of defining who is a trainee and what they may assert as the potential subsequent disincentive of having a lower training rate—which might cause people to take jobs without rather than with training—they have a young person's national minimum wage rate. All the evidence suggests that, whether that is right or wrong, the Government are likely to mitigate thereby the adverse economic and job consequences of the national minimum wage.
I recall a study in Spain that concluded that young persons were far more likely to be adversely affected in their job prospects by the imposition of a national minimum wage at a uniform rate, so it is right to have regard to young persons, and to recognise the conclusions of that study.

Several hon. Members: rose—

Mr. Lansley: I will give way to the hon. Member for Birmingham, Selly Oak (Dr. Jones), who has sat through all the proceedings today.

Dr. Lynne Jones: Does the hon. Gentleman recall the experience in this country after the Wages Act 1986? The minimum rate set by wages councils was abolished for the under-21s, and there was no increase in employment for young people—in fact, exactly the opposite.

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Mr. Lansley: This is not a criticism, but the hon. Lady does not have the benefit of having sat through our discussions in Committee. If she had, she would know that it is extraordinarily difficult to assess the impact of a minimum wage in a growing economy. The growth in the United Kingdom economy after 1981 and the growth in employment after 1986 were such that it was difficult subsequently to draw conclusions.
The academic evidence shows that it is better to study the inter-war years and the impact of minimum wages in agriculture. Within one overall economy—we can assume that, broadly speaking, the broader economic movements were the same—the minimum wage was varied even by county. Where the minimum wage was higher, there were adverse job consequences. Within one economic area, a variation in one parameter—the minimum wage—led to positive or negative job consequences.

Mr. Bercow: Does my hon. Friend agree that the problem for Labour Members is that they always look for a mechanistic relationship, but almost invariably the relationship is not mechanistic? There is no greater logic in what the hon. Member for Birmingham, Selly Oak (Dr. Jones) said than in the statement in Committee by a number of Labour Back Benchers that there were low wages in particular parts of the country in the early 1980s, but unemployment rose nevertheless. If there were low wages but unemployment rose, the implication is that


therefore there is never a case for low wages. There is no logic in that—there might be in the minds of Labour Back Benchers, but not in the minds of more sagacious people.

Mr. Lansley: I am grateful to my hon. Friend, who made his point well.

Mr. Ian Bruce: rose—

Mr. Lansley: I will give way to my hon. Friend one final time.

Mr. Bruce: I hope that it is not the final time. My hon. Friend is missing one point. The effect of wages councils setting particular wages for particular age groups was very effective in my business. I ran an employment agency, and usually the companies I supplied were not affected by wages councils. If someone was doing a job, whether aged 16, 17, 18, 20 or 80, he got the same rate of pay. It was only when dealing with the Aerated Waters Wages Council, which set lower rates of pay for 16, 17 and 18-year-olds, that I was forced by employers to pay them less money, because that was required by the wages council.

Mr. Lansley: My hon. Friend initiates consideration of an issue that might well repay being examined at greater length, but it is better that he should do so than that I should attempt to do so.
Hon. Members seem to want to draw implications from the experience of the wages councils, so we could look at the relatively closed circumstances of the Agricultural Wages Board. The structure of the wages council is to be jettisoned in favour of a uniform structure. That raises the question why, if Labour Members want to replicate, through the national minimum wage, what they perceive, perhaps erroneously, to be the benefits of past wages; councils structures, they do not replicate the structure of wages councils in their variations in respect of, for example, casual workers and the Agricultural Wages Board.
I rose to move new clause 4 and to make only brief comments on the new clauses and amendments grouped with it, so I shall leave it to others to refer more specifically to them.

Audrey Wise: The only phrase that unites the new clauses and amendments is that they refer to "persons who do not qualify." I want to distinguish my amendment No. 79 from the other new clauses and amendments in this group. There is a clear distinction. Conservative Members want to increase the number of people who do not qualify; my hon. Friends and I want to protect the position of those aged under 26. We want them to qualify for the minimum wage.
I am obliged to the hon. Member for South Cambridgeshire (Mr. Lansley), who did me the favour of attacking my amendment. That was both helpful and convenient. Before coming to the meat of my amendment, I want to commiserate with my hon. Friends on the Front Bench and those who served in Committee. I have had

four and a half hours of Conservative Members wasting time; I dread to think how I would have felt had I suffered the many hours suffered by my hon. Friends—

Mr. John Healey: Eighty-six.

Audrey Wise: I double my commiserations. Concerned as I am about those under 26, there have been times when I have thought that some of the arguments in the previous debates were put by those under six.
Clause 3 says of those who have not reached the age of 26:
The Secretary of State may by regulations
prevent them from
being persons who qualify for the national minimum wage.
That is of great concern to us. As an alternative, the clause says that there could be a different rate for those under 26. Clearly that means a lower rate.
Those under 26 are certainly persons—they are adult persons. My amendment would replace the age of 26 with the age of 18. When someone becomes 18, he can vote for the Government or fight for his country. In many jobs, especially those likely to benefit from the minimum wage, those over 18 get the adult rate—especially if they are lucky enough to work somewhere that is trade union organised. Trade unions have fought for the adult rate at the age of 18 in exactly those jobs that would benefit from the minimum wage, and for many years they have succeeded.
Under-26s are certainly adults. Many will have children. I had been married for more than seven years, and had two children by the time I was 26. I would have been deeply offended, affronted and horrified, and would have thought it bizarre if anyone had suggested that I was not an adult until I was 26. Some of those who might not qualify for the minimum wage are lone parents, about whom we have had much discussion. Many under-26s, including lone parents, will certainly have many heavy responsibilities.
The school-leaving age is 16. By the age of 26, many people will have left school for 10 years, and they will have been working, hopefully, for most or all of that time. I was therefore surprised—to say the least—to note that the Government felt it necessary to include clause 3 in the Bill.
I very much welcome the Bill, and I admire the tenacity with which my hon. Friends on the Front Bench have stuck to a single national rate and fought off all the blandishments suggesting all types of other complicated arrangements. They have been quite right in doing so. However, while there is a possibility of excluding those under 26, we must continue to feel alarm about the Bill's universality.

Mr. Hammond: Has the hon. Lady also noticed that, in clause 4, the Secretary of State will have powers to exclude persons over the age of 26?

Audrey Wise: We are debating clause 3. As we are debating clause 3, I shall speak to that. The hon. Gentleman's intervention does not encourage me in giving way to Conservative Members.

Mr. John Redwood: I quite understand where the hon. Lady is coming from with amendment


No. 79. Were I a socialist, I am sure that I would want to do the thing properly, which would mean a comprehensive minimum wage. Can she explain to the House why the Government are letting down her and other Labour Members in such a manner? Can she account for Ministers' conduct in leaving out what a socialist would consider the guts of the Bill?

Audrey Wise: The right hon. Gentleman says that he knows where I am coming from—of course he does: I am coming from Preston, where many people are sorely in need of a minimum wage. I need no lessons from Conservative Members, who have tried as much as they possibly can to obstruct the Bill's passage and resorted to the most childish arguments—because there are no good arguments against the Bill. Although this debate is being held on the Floor of the House, I am afraid that our conversation and the controversy will have to be rather more exclusive.

Mr. Bercow: Will the hon. Lady give way?

Audrey Wise: No, I will not give way to the hon. Gentleman. I have already had to endure his efforts for all too long. Let us keep to the matter, which is between me and my hon. Friend the Minister, who I know will be listening seriously to our arguments.
People are adults long before they are 26, and many people under 26 will have heavy responsibilities. They will certainly be responsible for their own upkeep. From the age of 18, it is quite clear that no one else will have responsibility for them. It is not difficult to establish their needs. I should be very interested to hear whether an argument could be made that one has to wait until 26 before accumulating adult income requirements.
People might ask, "Can those under 26 do the job? Do they do the job?" Some jobs are more complex than others. However, as I have already said, and as my hon. Friend the Minister will know very well—as he understands these matters very well and has a similar background to my own—many trade unions have established the adult rate at 18, and it would be very divisive if working people over 26 were afraid that they would lose their jobs because employers preferred to use cheap labour. Those working people over 26 would therefore be aggrieved. Those under 26 would be equally aggrieved, because they do not want to be cheap labour. Therefore, neither those over 26 nor those under 26 would be happy if the clause were activated.
Clause 3 is an empowering clause. My main objective in tabling my amendment and in speaking to it is to make it quite clear that a substantial number of people who are loyal supporters of the Government would be deeply dismayed if the clause were ever activated. I am very sorry that the clause—which hangs there, like a rain cloud—is in the Bill. However, it does not have to be activated.
8.15 pm
I therefore ask the Minister for some assurances. I have read the Committee's proceedings on clause 3, and was very pleased to see that he said that he did not want people

under 26 to be used as "skivvy labour", as they had been in the past, and as some of them still are. I very much welcome that assurance.
My hon. Friend also said of clause 3:
The proposals are consistent with the concept of the universality of the Bill."—[Official Report, Standing Committee D, 27 January 1998; c. 367.]
I do not understand that. Universal application of a national minimum wage should mean that it was applicable to all adults. I listened to our earlier debate on the voluntary sector, and I well understand those provisions in the Bill and have no quarrel with them. However, we are talking now about employees who earn a living by selling their labour, and the national minimum wage should apply to them from the age of 18.
I should like clarification from my hon. Friend on a specific matter. In Committee, he said:
the recommendations, whatever they are, will be brought to the House for decisions to be made on regulations.
This debate is being held in the dark, as we do not yet know the Low Pay Commission's recommendations or how the Government will react to them. There is therefore an element of "just in case" about our debate. However, if anyone thinks that it will be easy to pass clause 3 and to have it accepted with equanimity or approval, they are wrong. If it is in the Bill just in case it can be got away with, many of my hon. Friends and I will do our level best to ensure that it is not got away with.
I should like to be as helpful as I possibly can to my hon. Friend the Minister, because Ministers really have done a very good job in the other parts of the Bill. It would be very helpful if he can assure me that his statement in Committee means what I think it means—that
the recommendations, whatever they are, will be brought to the House for decisions to be made on regulations."—[Official Report, Standing Committee D, 27 January 1998; c. 370.]
Does "the House" mean the Floor of the House—this Chamber? Will we be able to debate any regulations here? I am sure that many hon. Members would very much welcome such an opportunity, if that is what it is.
We do not want to feel that establishing the terms of a minimum wage is a matter of now or never—which it should not be, as there are many contingencies of which we are not yet aware. I hope that the Minister will be able to reassure me on that matter.
Much has been said about Ministers wanting to hear the Low Pay Commission's recommendations. I regret that the age issue was even referred to the Low Pay Commission, as such a referral gives the impression that the matter is somehow technical.
I hope I have made it clear that I do not regard this as a technical matter. I regard it as a matter of adults doing adult jobs and having adult responsibilities, who may yet find themselves excluded from the national minimum wage. I hope that that will never happen: I hope that the Low Pay Commission will not recommend it, and I hope that, if it does, the Government will not accept its recommendations.

Mr. Bercow: Will the hon. Lady give way?

Audrey Wise: No. I referred to the under-sixes, and I had the hon. Gentleman in mind more than any of his


hon. Friends. [HoN. MEMBERS: "Some under-sixes are very bright."' There are arguments that are childish, with which it is not wise to delay the House. There are other arguments that relate to whether real people will be able to buy real food for real children, have a decent standard of living and not have to wait for that to happen until they reach the age of 26. It is because I share my hon. Friend the Minister's commitment to the Bill that I want to ensure that it is not undermined by this proposal, with all the divisiveness that that would entail.
I hope that my hon. Friend will accept my remarks in the spirit in which I have made them. He will not be surprised to hear that they were made in a spirit not only of helpfulness, but of determination. I also hope that he will give me the assurance about procedure that I sought.

Mr. John Redwood: I wish to speak to new clause 10, and also to comment on new clauses 4 and 5, which concern directors; on amendments Nos. 70 and 79, which relate to age-specific matters; on the Government amendments, which also cover the issue of age; and on amendments Nos. 53 and 54, which comes under the general heading "Persons who do not qualify".
I pay tribute to my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) for his excellent speech, and for all the hard work and common sense that he put into the Committee stage. I also congratulate other members of the Committee who have done a great deal to probe and test the legislation. As we are seeing this evening, however, much remains to be done.
We enter the Report stage, as we entered the Committee stage, in the spirit of wishing to offer constructive amendments in an attempt to deal with some of the more obvious pitfalls that the original legislation was likely to create. We welcome some of the Government amendments that we have seen so far, and my hon. Friend the Member for Daventry (Mr. Boswell)—who has done so much good work—has already welcomed the move that has been made in the right direction in a couple of instances. Nevertheless, we feel that Ministers should reconsider before the Bill's passage is completed, in order to avoid some obvious difficulties—difficulties that could rebound to hurt the very people whom I think the Minister and some of his hon. Friends intend to help. We wish those people no ill, and we want the Minister to think again.
It is difficult to discuss the range of exemptions from the Bill without knowing the level at which the minimum wage is likely to be set. The main worry that anyone has about the Bill is the worry that it could destroy jobs—the fear that it could cost people their jobs if the minimum wage is too far above their current level of pay. That could happen if employers were forced to pay the national minimum, and chose to cut the numbers that they employed at the same time.
That is our main worry about the Bill. It is not that we want low pay. My hon. Friends and I have often stressed that we want the highest possible pay for people, earned in the normal way in the marketplace. We want policies that promote high pay by creating the conditions for success. Nor do we think that people should have to live on some of the low wages that are still unfortunately paid. We have always supported—and I think this is bipartisan—a minimum income with top-ups from benefit. Of course we would like Ministers to succeed in

ensuring that more of people's money comes from employment and less from benefit—that, too, is common ground—but the issues concerning exemptions relate to a central question: would jobs be lost if the minimum level were set too high, and if too many people were included in the proposals?
What is surprising is the way in which the Government began. They began with the pure doctrine that it is possible for a Government to legislate for any level of wages that they choose without any consequences for jobs, but we have seen them slip and slide closer to our position, which is that to legislate for too many people at too high a level is to undermine job opportunities.
When the President of the Board of Trade launched the Bill on its tortuous journey on Second Reading, she offered minimum wage protection for all workers. In Committee, we saw the armed forces exempted from that promise. Tonight, we shall see whether all those under 26 will be exempted, or whether they will be given a lower rate or rates as a result of a powerful provision which, understandably, upsets the hon. Member for Preston (Audrey Wise) and some of her hon. Friends.

Mr. Ian McCartney: I intervene on a point of information. Clauses 3 and 4 were in the Bill on Second Reading, and the Government made no amendments to them in Committee. The Government amendments that we are discussing now are intended to clarify that position; they are not related to principle. We shall deal with the armed forces later, but the Armed Forces Pay Review Body will take care of armed forces personnel, and civilians in the armed forces will be covered by the national minimum wage.

Mr. Redwood: That was a brave effort, but the Minister protests too much. The armed forces proposal was made in Committee, after a period of sustained pressure on the part of the Opposition. Opposition Members said that the Bill was capturing too many people, and that problems were likely to result from such a wide coverage.
The Minister is right to say that certain clauses were in the Bill at the outset, but I am right to remind him about the strong statements—from him, as Minister of State responsible for this important policy, and from his boss, the President of the Board of Trade—that there would be minimum wage protection for all workers. There was no qualification in those original statements suggesting that those under 26 might be left out.
It so happens that people under 26 are the most likely category to be affected by a statutory minimum wage. It is probable that more people under 26 are below any likely minimum wage level than people above that age. The Minister is misrepresenting the history of the legislation. The promise began as a very general promise made by him and by the President of the Board of Trade. We have seen them gradually strengthen the rhetoric in favour of making a series of exemptions, and—in, for example, their evidence to the Low Pay Commission—putting more stress on the idea that perhaps all young people should, after all, be left out of the legislation.

Mr. Ian McCartney: The right hon. Gentleman entirely misrepresents the Government's evidence to the Low Pay Commission. It was completely neutral.


We made no recommendation to the commission on any aspect, other than asking the commission to consider the legislation and present proposals. Neither in the public nor in the private domain have we put pressure on the commission to do anything other than that.

Mr. Redwood: To draft clauses as the Government have, and then to write to the Low Pay Commission saying that the one group it should consider is those under 26, clearly implies that the Government think there is a serious argument for exempting all those under 26, or for giving them a lower rate. Otherwise the Government would not have put the clause in, and would not have written to the Low Pay Commission as they did.

Mr. Ian Bruce: Surely the truth of the matter must be that the Government know quite well what they are about to do. They could have asked the Low Pay Commission to make a prior determination. Basically, they are setting out to get through a Bill with which Labour Back Benchers disagree.

Mr. Redwood: I imagine that we share that worry with Labour Members. They may be conned by the measure in terms of the rates not being stated and who will be covered.

Audrey Wise: Will the right hon. Gentleman advise his hon. Friends that my hon. Friends and I are quite capable of telling the Government when we agree or disagree with them? I have not forgotten the many occasions when we were in opposition when I asked Ministers how low was too low in terms of pay, and the answer was never forthcoming. During all those years in opposition, it was crystal clear that no pay was too low to satisfy the Conservatives.

Mr. Redwood: That is not the position of the Opposition, nor was it the position of the Conservative Government.

Audrey Wise: The right hon. Gentleman should read Hansard.

Mr. Redwood: Until May 1997, the Government made it clear what they considered to be a minimum income for different groups of people, depending on their family circumstances and their outgoings. There was a strong and long record of Conservative measures to boost incomes through family credit, housing benefit and income support for those who were not in employment. Some of them were bipartisan measures that mirrored the policies of previous Labour Governments. It is quite wrong for the hon. Lady to say that Conservative Members have any wish for people to live on inadequate incomes; we believe that in certain cases there should be a mixture of benefit and wages.

Mr. Jeremy Corbyn: The right hon. Gentleman has not answered the point raised by my hon. Friend the Member for Preston (Audrey Wise). He is correct in saying that the Conservative Government introduced and used family credit as a tool to prop up low

wages and subsidise employers. The Conservatives were always very keen on propping up low wages and subsidising employers, but I do not recall any Conservative Minister ever condemning a low wage. However low it was—£1 an hour or 50p an hour—it was never low enough for the Conservative Government to criticise.
Will the right hon. Gentleman briefly say what he thinks the minimum wage should be? I would love to hear the answer—and so would an awful lot of other people. The Conservative Government never condemned any employer for using bargain-basement tactics to force young people into disgracefully low-paid jobs.

Mr. Redwood: I have made it clear that we concentrated on the income going to the individual or family. We set out what we considered to be the minimum levels of income. If it could not all come from employment income, it was topped up by state benefits. The one matter on which the hon. Gentleman and I agree is that we would like those levels to rise and more to come from employment and less from the taxpayer.
The debate between the two sides of the House is not about that but about how it should be achieved. Will we create more jobs by allowing employers to offer jobs and employees to accept them, or by telling employers that they cannot offer certain jobs at certain levels of pay? I submit that, on reflection, the hon. Gentleman will agree that the former position would result in more jobs. If we achieve success in education, training and promoting an enterprise economy, all wages will go up, and that will be good news.

Mr. Bercow: The inane ramblings of the hon. Member for Islington, North (Mr. Corbyn) notwithstanding, does my right hon. Friend agree that the real point that emerges from recent exchanges is that no minimum wage is too high and no loss of jobs is too great to cause the hon. Member for Preston (Audrey Wise) to abandon her ideological enthusiasm for a minimum wage? The realities, the consequences and the net effects are not exactly at the forefront of her mind.

Mr. Redwood: I think my hon. Friend is gently chiding me for expressing any sympathy for the hon. Member for Preston. I am sympathetic to her—I know she does not want my sympathy—because she fought the election in the belief that there would be a fairly high national minimum wage applying to everyone. She could have deduced that also from the early statements of the Minister and the President of the Board of Trade. The Bill, with its ragbag of exemptions, some of which we welcome, must be a terrible disappointment to her.
I sympathise with the hon. Lady, but my hon. Friend the Member for Buckingham (Mr. Bercow) and I disagree with her judgment, and that is why we are not socialists. We do not believe that it is possible legislate to create prosperity in that way. If it were, we would have done it and we would have been more popular, but the Government are in danger of legislating people's jobs away rather than legislating for higher pay for a lot of people.

Mrs. Maria Fyfe: For the record, and for the sake of clarity, I can recall Conservative


Ministers and Back Benchers being asked whether any pay was too low. Although they never gave a figure, they often replied that people should price themselves into work. They repeated that phrase time and again. Is that still their position, or have their views changed?

Mr. Redwood: I shall try to explain again. Ministers said then, and shadow spokesmen say now, that there are levels of pay that are too low to support the family life of the individuals concerned, and that something should be done about it. In government, we introduced ways of topping up those incomes. We also adopted a series of policies that promoted a more successful economy in many years under the Conservatives. During those periods, wages generally rose. The Labour Government are trying to achieve through legislation what we did by economic success. The best way of getting people into jobs that pay well is economic success, enterprise and growth—which is what I trust both parties wish to see. The argument is about how to achieve them.

Mr. Lansley: Before my right hon. Friend moves away from this point, does he recall that, in October 1996, the Organisation for Economic Co-operation and Development produced a report on the possibilities of different forms of welfare for those on low wages or in low-skilled jobs? It stated:
This calls for a new income supplement for low-wage jobs, possibly accompanied by a lower minimum wage, to reduce employer costs while retaining a minimum income guarantee.
The OECD called for a direct employer subsidy in Europe, but in the United Kingdom we had a rather better system that supported the individual in work.

Mr. Redwood: My hon. Friend is quite right. He makes an extremely powerful point, which leads me to remind the House that there is a contradiction at the heart of the Government's policy of welfare to work. We hope that it remains welfare to work and does not become work to welfare, but one wonders, given some of their measures.
Some of the steps that the Government are taking are designed to lower the costs of employing people in order to produce more jobs. That is the idea behind some of the Chancellor's measures. He may reduce tax on the lower-paid for the same reason—that he wants to increase their net take-home pay to produce a given level of employment income. That is a sensible idea, but how does it square with trying to increase wages by Act of Parliament, running the risk of pricing some jobs out of existence? It is the opposite of what the Chancellor is trying to achieve by other policies.
If we ran the numbers through a computer, we might discover that, after all the twisting and turning, we would be worse rather than better off as the job-destroying effects of measures that increased employer costs—the tax measures and those in the Bill—more than offset the advantages that the Chancellor is trying to offer by means of other parts of his strategy.

Mr. Michael Jabez Foster: Can the right hon. Gentleman explain the problem in my constituency? Hastings and Rye has the lowest wages in the south-east—something like two thirds of the national average, or a little lower. We also have the highest unemployment rate in the south-east. The problem cannot

be blamed on the Labour party, since, until the general election, the constituency had been represented by a Conservative Member of Parliament since 1902 and until recent years there was a Conservative council. Can the right hon. Gentleman explain how there can be areas of low wages and high unemployment if there is some relationship between the two?

Mr. Redwood: I thought that Labour had a solution to that. The Government came to power saying that they would tackle such pockets of persistently and unpleasantly high unemployment in their early days. It is interesting that the hon. Gentleman is seeking the expertise and advice of the Conservatives. He clearly has no confidence in the ability of the Government he supports to solve the problems.
The decline of traditional activities in seaside towns has often been too steep for the creation of new jobs and new opportunities to keep pace. I trust that the hon. Gentleman will work to help to raise school standards, to broaden the horizons of young people leaving school, to ensure that the training offered is of the highest quality and to promote that training to businesses. He is likely to attract more jobs and more businesses by supporting the successful enterprise policies that we followed in the 1980s and the mid-1990s than by following the over-prescriptive and over-regulatory policy that the Minister would like. Countries that have followed such regulatory policies have higher unemployment than Britain—including his constituency.

Sir Teddy Taylor: Does my right hon. Friend accept that, in Hastings, Southend-on-Sea and other seaside towns, one of the problems is not the level of wages, but the fact that, although we have high levels of unemployment, some of our travel-to-work areas have much lower unemployment, depriving us of the grants that many other areas have? Is that not a result of European bureaucracy, which insists that the Government have to take travel-to-work areas into account? Would it not be better if the Government—Conservative or Labour—were free to give help to such areas of high unemployment without the restrictions imposed by foolish Euro-regulations?

Mr. Deputy Speaker: Order. That really is going much wider than the group of amendments allows. I hope that the right hon. Member for Wokingham (Mr. Redwood) will be able to keep within the group.

Mr. Redwood: I shall not be wandering off. My hon. Friend has made his point. I had thought that some Labour Members were tempting me a little wide of the group, although it contains some general issues that relate to how many exemptions there should be, which needed some general exposition.
My hon. Friend the Member for South Cambridgeshire has pointed out that directors are caught by the Bill. He made an important point, saying that a director who wanted his business to grow might find it tax-disadvantageous to pay himself any or much salary. It might be better for him to use the cash coming in to invest in the future of the business and not have to pay himself an income. That powerful consideration persuaded me that his new clause has a great deal of merit, as does new clause 5, which is similar.
I noticed an interesting story in The Times on Thursday 5 March about James McSporran, from a Hebridean island. Mr. McSporran has just retired from one of his 13 jobs. He has been, or is, postman, rent collector, shopkeeper, ambulance man, taxi driver, school bus driver, pier master, registrar, insurance collector, petrol pump attendant, undertaker and proprietor of the guest house. Until five years ago, he was also fire master and coastguard. He may well be a director of one or more of those businesses. If he is not, there may be another Mr. McSporran with a similar portfolio of activities that includes a number of directorships.

Mr. Corbyn: How many directorships does the right hon. Gentleman have?

Mr. Redwood: I have no directorships. My work is cut out keeping up with all the extraordinary schemes coming out of the Department of Trade and Industry and the very badly drafted legislation that it brings before us. The hon. Gentleman is making me deviate from the important subject under discussion.
Mr. McSporran and those like him will have to pay themselves—or be paid—the minimum wage for each of their activities. That is extraordinary. If Mr. McSporran or someone like him is a director of two or three small businesses that provide a community service—doing that work partly for normal business reasons and partly to make a contribution to their community—they are the best judges of whether they need to pay themselves a lot, a little or nothing. With such a portfolio of interests, presumably they have money coming into the family to meet their requirements.

Mr. Corbyn: Before the right hon. Gentleman continues with his extraordinary argument about one person holding 13 jobs, I remind him that the Bill relates to an hourly minimum rate. People can be paid more than that minimum. Is the right hon. Gentleman suggesting that such a person will get 13 times the hourly rate for each job he does? If so, he has clearly not read the Bill.

Mr. Redwood: The hon. Gentleman is getting confused. My point is that, for someone with 13 jobs—or even four or five jobs—including directorships, it is reasonable that they should be free to be paid a lot or a little depending on their circumstances and the circumstances of the business, rather than having to be paid the statutory minimum for the hours they are working, or say they are working, in that role. The hon. Gentleman should reflect on that.

Mr. Hammond: Does my right hon. Friend agree that it is extraordinary for Labour Members, who are so fond of talking about fat cat directors paying themselves too much out of profits, to want to prohibit directors of companies that might be in trouble and might be faced with the possibility of having to lay off workers from agreeing to take no pay to save the business?

Mr. Redwood: It is extraordinary. My hon. Friend has pre-empted a point that I was about to make. Not only is

there the case set out by my hon. Friend the Member for South Cambridgeshire of a director of a business that wishes to grow deciding that that is a higher priority than paying himself a lot—or anything at all—in the early days. There is also the case of the ailing or failing business.
Let us suppose that a failing business has a senior director, a chairman or a chief executive who is also a director who has made—

Mr. Ian McCartney: What about Asil Nadir?

Mr. Redwood: Perhaps the Minister would like to think about the Paymaster General, who has had a lot of experience in business matters. One of the companies that he was involved with got into cash-flow difficulties—I think that that is the polite way of saying it. If such a director had some savings from past financial success to enable him to look after his family, would it not be a public-spirited gesture for him to cut his pay to below the national minimum? Why should he have to pay himself the national minimum if he seriously believes that one way to get the company out of trouble is to cut the costs that he is imposing on it? It would be altruistic for him to forgo money so that some of the staff could be maintained and paid their wages while the company got out of trouble.

Mr. Ian Bruce: My right hon. Friend has missed the obvious point that Lord Simon works for the Government for nothing—or so we are told. Under the Bill, he would not be allowed to do so.

Mr. Redwood: We are not sure how the legislation will treat benefits in kind, of which Ministers get rather a lot. Would they have to attribute as remuneration the diary secretary, the personal secretary, the car, the chauffeur and all the other benefits, which I believe that Ministers without a salary still enjoy? If that was not part of remuneration, the problem that my hon. Friend mentions would become a difficulty. Many businesses are struggling or in difficulty and need to cut their costs. It is rather good if directors offer the lead and cut the costs that they are imposing on the business. As I understand the legislation, it would, to some extent, prevent that.
I do not know whether the Minister and his colleagues at the Department have thought through the consequences in relation to insolvency law. Directors must not knowingly trade while a company is insolvent, and they are under a duty to take all necessary steps to keep a company solvent. The Bill would remove one of the steps that directors could take, particularly if there were an expensive board. Minimum pay requirements would limit the reductions that they could make in board remuneration.
I hope that the Minister will take that matter seriously and try to explain how the legislation relates to directors' duties. What does he imagine would happen if a company were in danger of going into administration? Some directors or former directors of companies have offshore trusts, for example, which can provide them and their families with money to keep them going, and as a result enable them to make the necessary reductions in the charge that they represent on the company.
Another related issue—unfortunately, new clause 9 has not been selected for debate, but new clauses 4 and 5 relate to the same issue—is the employment of a spouse.


I hope that I can raise the matter on the hypothesis that a spouse could be employed as a co-director of a small family firm. As one hon. Member has pointed out, a family—a husband and wife team—sometimes wishes to arrange remuneration in such a way that one member earns most of it and the other does not see the need to draw an income but wants to make a contribution to the family concern. The Bill would make that difficult or impossible. Our proposals on directors would at least help where the employment of a spouse took the form of a directorship of the family company or small company. I would have liked more general exceptions, but amendments that would have achieved that have not been selected.
New clause 10, which I tabled, is designed to tackle a very serious and sensitive issue: the question of employment of severely handicapped persons. All of us in the House wish to see disabled people leading the best of lives, and want everything for them that helps them to fulfil their potential. I am sure that hon. Members on both sides of the House are united in wanting disabled people to work where they can and in wishing to see everything done to make that possible. In that spirit, we hope that the Minister will think again about the position of the most severely handicapped people for whom some light work is available.
We have drafted new clause 10 very carefully and cautiously to show that we are not in favour of depressing the pay of disabled people. We have drafted it so as to leave much discretion to the holder of the office of President of the Board of Trade, showing that the proposal is made in the right spirit. We have proposed that the President of the Board of Trade should have a power to make an order under the Act, which would allow the issuing of permits to any groups or individuals who wanted to work and were able to work for less than the minimum wage, where special circumstances made it unlikely that they would be able to command the minimum wage for what they were capable of doing and wished to do.
We have left the power very general. We have not thought out all the details. We would want the matter to be handled with a great deal of sensitivity. For example, it could be a requirement of the issuing of any permit that the individual, and/or his or her carer, would have to want the provision to be implemented before it could be implemented. Otherwise, they could come under the legislation in the normal way wherever possible. I hope that the Minister will look very carefully at the new clause and reflect on whether he may have inadvertently done more damage than he intended to a group whose members need all the help they can get from us all.

Mr. Ian McCartney: I ask the right hon. Gentleman, in the same spirit, to withdraw that last remark. I have never intended any damage to anybody who has a physical or mental disability. I have spent a great deal of my life as a voluntary advocate on those people's behalf. I am sure that it was not the right hon. Gentleman's intention to suggest otherwise.

Mr. Redwood: I did not think that I had made such a suggestion. I thought that I said that the Minister intended well for the disabled, as I do. I hope that the record shows that. If it does not, this is a correction for the record.
I turn to amendment No. 79, to which the hon. Member for Preston (Audrey Wise) spoke interestingly. She combined a fairly ferocious attack on her Front-Bench team with a reluctance to press the matter fully, fearing that she had perhaps gone too far with the new Labour team. She was clearly trying to shame the Government. Having driven a coach and horses through the Government's majestic but ill-conceived proposals, she looked towards the end of her speech as if she might settle for rather less than she originally intended.
I liked the choice of words of the hon. Member for Preston in describing clause 3 as a "rain cloud" over the legislation. We on the Opposition Benches see just a great sky of clouds, and fear that the rain will wet those least able to withstand it. The hon. Lady sees it the other way round; she feels that "the cloud" is that people whom she would like to be included in the legislation will be left out.
I had a lot of sympathy with the hon. Member for Preston when she asked why the age of 26 should be stipulated. I hope that the Minister will give us some thoughts on that. I could understand stipulating the age of 18, because that is the legal age of majority. I could understand the age of 21, because that is when many young people complete university, college or other tertiary education, and it is the old age of majority. I could certainly understand the age of 16, because that is the traditional school-leaving age. I could even understand the age of 25, because that is a quarter of a century, a nice round number and the type of anniversary that people celebrate. But 26 seems a very odd age.
As the hon. Member for Preston told us, she already had substantial family responsibilities by the age of 26. Most people would not only have completed their training by that age but would have had several years' experience in work, and may have moved jobs two or three times. By then, one would expect people to be making progress in their chosen careers or activities. So, it is very difficult to understand why the Government should create the only age break at 26, when they could have chosen so many different ages or, indeed, chosen a variety of age breaks, both high and low, for different purposes with different rates.

Mr. Bruce: The one guide is that the Agricultural Wages Board uses the age of 19 or over. I cannot understand why one should have to wait another six or seven years before one qualifies under the Bill.

Mr. Redwood: My hon. Friend reminds me of another legislative age limit. The age of 19 does not relate neatly to school leaving or college departure, but as he says, it is important to an important sector of our economy, and embedded in legislation. Perhaps the Government thought about it but rejected it for some reason or other. I hope that the Minister will offer some explanation when he addresses the Government amendments, which seek to change the wording concerning the age break. Amendment No. 79 would ensure that all young people are included under the legislation, while amendment No. 70 would ensure that no one under the age of 18 would qualify for the national minimum wage in the interests of preserving employment for the youngest members of the work force.
Since the Bill's inception as a manifesto promise before the general election, during early ministerial statements and in Committee, we have seen a perpetual muddle over


the treatment of young people. We thought at the beginning that young people were to be treated like anybody else—hence all the statements about equality and the national minimum wage applying to all. If the then shadow spokesmen were challenged before the election about the job consequences, they either said that there would be no job consequences—they believed that they could legislate for a national minimum wage without destroying any jobs for young people—or they implied that the single uniform rate of a minimum wage would be set low enough to avoid the worst consequences for young people.
It is necessary to return to the issue of the rate. In its 1992 general election manifesto, Labour told the public that £3.40 was the minimum acceptable wage for all the people that they wished the legislation to cover. I think the Labour party assumed at the time that everyone would be covered by the legislation; there was no mention in the manifesto of leaving out the armed services and so on. The Labour party then said that £3.40 was the rate, and that it thought that that would provide the best balance of advantage over disadvantage.
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Now the Labour Government are smuggling the Bill through the House without naming the rate. I assume that they are doing so because they can no longer live up to the promise that the Labour party made to its supporters in 1992. They do not intend to set a minimum wage of £4.61 an hour, which—in terms of relationship to average earnings—I believe is the modern equivalent of the £3.40 that Labour suggested in 1992. If the Minister wishes to disagree and say that £4.61 is a serious runner, I should be very interested to hear it because it would be germane to the issue of where to set the break point of age for young people and for older people; but his expression tells me that he does not have in mind anything like £4.61, so the Government are planning a lower wage rate than the one that the Labour party was planning in 1992.

Mr. Ian McCartney: I know it seems as though the right hon. Gentleman is provoking me, but let us be clear from the outset. During and since the general election campaign, the Government have made it clear that the Low Pay Commission would be asked to consider this matter and come up with proposals, following which the Government would take decisions, and that subsequent to that, any decision that the Government made would be subject to secondary legislation before the House.

Mr. Redwood: I agree that we have heard that repeatedly. We are not sure, however, whether the Minister has a rate in mind and the Low Pay Commission exists simply as a fig leaf whose view he will ultimately overturn if he does not agree with it; or whether the Low Pay Commission will recommend the rate and Ministers, in all but extreme circumstances, will accept its recommended rate.

Mr. Bercow: Does my right hon. Friend agree that the Government's self-denying ordinance on the subject of

the rate of the national minimum wage would seem a little more credible if it were accompanied by a silence to the newspapers? Given that the situation—

Mr. Deputy Speaker: Order. This has absolutely nothing to do with the group of amendments that we are discussing.

Mr. Redwood: I think that my hon. Friend just wished to develop the point about the level of the remuneration, which is central to the choice of age break in the Bill. If the national minimum wage is to be very low, we should choose a different age break from the one that we would choose if it was to be very high.
That is our difficulty tonight. We are asked to settle the age breaks tonight, in the Chamber, when the Minister remains unwilling or unable tell us not only what the rate will be but whether he will decide it, in practice, or whether the Low Pay Commission really knows all the answers.
Nevertheless, it appears increasingly likely that the national minimum wage will be about £3.60, rather than the £4-plus that people originally intended. That means that the Bill will not do as much damage to young people's jobs as if the Government were setting the national minimum wage at a higher level, but it will be a bigger disappointment for people like the hon. Member for Preston, who had hoped that it would be set higher, for the reasons that she gave. I hope that the House, will keep in mind the question whether 26 is the right break point, given what we might be able to deduce concerning the level at which the national minimum wage will be introduced.
Amendment No. 53 requires the President of the Board of Trade to take the advice of the Low Pay Commission before amending the descriptions of people covered by the Bill. The amendment is designed to try to discover what are the relative powers of the Low Pay Commission and the Minister, over this important range of issues of exemption. The Minister has been unwilling to explain the balance of power in relation to the level, which is central to the amendments before us. We are trying to persuade the Minister to say whether he and his right hon. Friend the President of the Board of Trade are in charge, or whether the Low Pay Commission will retain a great deal of influence and power in the early stages of the establishment of the minimum wage.
As someone who believes in ministerial control and ministerial accountability through the House, I hope that the Minister will be brave enough to take decisions and come to the House to defend them. Obviously, he will use the Low Pay Commission's advice, because he has gone to much time, trouble and expense to establish it and it would be silly to ignore it, but it would be better, for the House and for our democracy, if he and his colleagues took the decisions in the light of the advice that they received, and came to the House to defend them.
Amendment No. 53 would oblige the Secretary of State to take the advice of the Low Pay Commission before amending the descriptions of persons to whom clause 3 applies. Having established the commission, it would be foolish not to listen to what it says or to draw on its expertise, but I hope that the Department of Trade and Industry will not make further progress towards quango government—a trend that is visible in too many


Departments of State under this Administration. We have a quango to run our monetary policy, a quango to run our food policy and a quango to run our development policy—and now, perhaps, subject to what the Minister says, we shall have a quango to run the wages policy. There is a huge expansion of the quango state, at the instigation of the people who, in opposition, delighted in criticising the range and powers of quangos that were then in existence. I always preferred a little less to a little more quango. We now have a Government who say that they would like a little less quango but are busily creating quangos on a huge scale, which dwarfs anything that the previous Administration did.
Amendment No. 54 would allow the deletion of descriptions from the exemption list as well as permitting exemptions to be added under the other powers in the clauses that we are discussing. It is a useful amendment, as I hope the Minister agrees.
I had the impression that the Minister wanted as few exemptions as possible. I may be wrong, but I have the impression that the Minister is ending up with more exemptions than he would have liked or originally had in mind. I do not think that he was terribly keen on the exemption of the armed services, and he may not be keen on the exemption of young people. By tabling the amendment, we are offering him an opportunity to have another go with his colleagues in government later, to persuade them that there are too many exemptions and that those exemptions should be removed.

Mr. Bercow: Does not our support for the amendment show that we are prepared to have our judgments influenced over a period by objectively observable economic facts and outcomes that flow from the national minimum wage? If only Government Back Benchers were prepared to have their judgments similarly influenced instead of sticking to abstract, ideological dogma, they might do a little bit better.

Mr. Redwood: Indeed, I am beginning to wonder whether offering Opposition support for the amendment is too generous; but it is important to find out where the Minister stands on this issue. As the hon. Gentleman should be aware, my colleagues and I fear that, even now, there will not be enough exemptions in the legislation—that many more hard cases will come to light and he will have to rush back to the House to add to the list in one way or another. That is why he should spend a little more time studying what has happened overseas in countries that have introduced minimum wage legislation.
Many of those countries have established minimum wages that are considerably below the level of the 1992 Labour manifesto, and even below the level that the Government will eventually recommend following this agonising study process. In those jurisdictions abroad, even those with low national minimums—well below the level that some Labour Members would like here—they have had to amend and amend again their legislation to exempt more and more groups of people and hard cases.
In Committee and during these relatively brief exchanges on the Floor of the House, we have identified various groups that the Minister may regret having included so comprehensively. If he is not thinking of using the powers in the Bill to exempt all people under 26, he will discover that it will considerably damage youth

employment opportunities if he sets too high a level of minimum wage. I trust that he has seen the way in which the continent of Europe is disfigured by high youth unemployment, which is in part related to minimum wage legislation and other labour market restrictions in those countries, which have made it more difficult for young people to get the jobs that we want them to enjoy. So, when it comes to young people, I hope that the Minister will study those situations carefully and decide that he needs to use the power in the Bill.
I also hope that the Minister has thought again about directors. I trust that the Opposition are making a sufficiently powerful case that they should be in a different category. They are responsible for their businesses in a very real way and should be offered the freedom and flexibility to provide the sort of leadership that is sometimes needed. It would be most welcome if Labour Members would occasionally recognise that there are some intentionally thin cats in the corporate world—directors who have offered a lead because they want to save their businesses by reducing the costs that they impose on them.
I hope that the Minister will think again about the position of spouses and about the flexibility of the legislation in adding to and reducing the number of exemptions required. Above all, I hope that this discussion and the debate both in Committee and here tonight will have made him aware that well-intentioned legislation could go horribly astray if the Government set the wrong rate, persevere with too few exemptions and do not understand the threat to people in training or with different types of remuneration—if they do not understand the enormous flexibility of the marketplace, which has generated jobs with all types and styles of remuneration, benefits in kind and the like, that need careful analysis before the somewhat crude injection of legislation into the equation.
I urge the House to support the new clauses and amendments standing in my name and those of my hon. Friends, and I urge the Minister to think again about these issues.

Dr. Lynne Jones: On that glorious day in May 1997, Labour Members were elected on a pledge to introduce a minimum wage, and to abolish poverty pay and worker exploitation. I for one was not aware that that wage was not to apply to young adults in their 20s. Indeed, the Labour party in opposition opposed measures that reduced the rights of that age group—for example, the Tory reductions in benefit for the under-25s. We argued that that age group were adults and had the same expenses as their older colleagues. That must remain the case.
The majority of young people in the under-26 age group have left home—the average age for leaving home is 20—have their own households and have the same expenses as older people. There is no justification for paying them a lower rate. Indeed, it would be discriminatory. Young women in particular are more likely to have left the parental home and to have the expense of running their own home. It would be very worrying if a Labour Government introduced this long-awaited legislation in such a way as to give less protection than was afforded to 3.5 million workers in the 1970s and early 1980s by wages councils.
In 1986, the Labour party opposed the Wages Act that was introduced by the Tories. The Act removed people aged under 21 from the protection of wages councils. As has been said, that did not lead to an increase in the number of jobs for people in that age group—quite the contrary. Nevertheless, between 1986 and 1993, when the wages councils were abolished, adult rates of pay applied to people over 21. I should hate to think that a minimum wage that was introduced by a Labour Government would not apply to that age group. Even today, agricultural workers enjoy a minimum wage: 18-year-olds have a minimum wage of £3.51 an hour, and all those over 19 receive a minimum wage of £4.12 an hour.

Mr. Ian Bruce: The hon. Lady cites the figures—which I have in front of me—correctly as they relate to people who are permanently employed. Temporary workers—those people who are employed for specific jobs—receive respectively not £4.12 but £3.06 an hour, and not £3.51 but £2.60 an hour. A 16-year-old receives £2.47 in a permanent job and £1.84 an hour in a casual job. Those rates were introduced by the Government last July.

Dr. Jones: I cannot comment on that. I had hoped that we would want rates of pay to apply to all workers, regardless of whether they are temporary or permanent. I am disappointed to hear that information. I hope that the Bill—as I think my hon. Friend the Minister has made clear—will establish a universal minimum wage that will apply to the workers whom the hon. Member for South Dorset (Mr. Bruce) has mentioned.

Mr. Ian McCartney: The hon. Member for South Dorset (Mr. Bruce) is being disingenuous. The agricultural wages council report was drawn up by the Agricultural Wages Board, which is made up of employers and trade unions. The purpose of the Bill is to ensure that, where an Agricultural Wages Board payment is less than the declared minimum wage, the minimum wage will apply, and that, where the agricultural wage is higher than the minimum wage, the agricultural wage will apply. The Bill will improve the system for all agricultural workers.

Dr. Jones: I thank my hon. Friend for that clarification—that is what I hoped to be the case.
The purpose of clause 3 was to allow the Government to take into account the recommendations of the Low Pay Commission, whose remit was to make recommendations on low rates or exemptions for those aged between 16 and 25. I am disappointed that the commission was given that remit. We can all accept that there are grounds for 16 and 17-year-olds—even perhaps 18-year-olds, as in the case of the agricultural wages council—being paid a young person's rate, but I cannot see any justification, especially in the light of experience, for introducing such measures relating to people who are older than that. I certainly hope

that the Low Pay Commission will not make such recommendations—I do not think that it would want to do so if it examined the evidence logically.

Mr. Redwood: Does the hon. Lady think that, if the Low Pay Commission recommends the exemptions she fears, the Minister should overturn them and stick to his guns?

Dr. Jones: If the right hon. Gentleman had allowed me to finish, we could have saved the House valuable moments, because that is precisely the point that I was about to make. I hope that the Low Pay Commission will not make those recommendations—if it considers the arguments sensibly, it will not do so—but, if it does, I hope that the Government will reject them. I hope that my hon. Friend the Minister will give us an assurance that, before any such decision is taken, we shall be able to debate it on the Floor of the House.

Mr. Ian Bruce: I should first declare two interests—they are already registered—in that I am a director of Ian Bruce Associates Ltd. and an unpaid director of EURIM, the European Informatics Market group, which is a not-for-profit organisation that acts in a similar way to an all-party parliamentary group.
I have been amazed by Labour Members finding great humour in the idea of directors not paying themselves as much as the minimum wage. I have not had much involvement in the Bill, but I almost idly asked one of the Clerks in the Table Office whether the self-employed were exempt, and he told me that they were, so I asked whether the same applied to company directors, and he said no. Apparently, the matter was not discussed in Committee.
I know that the Minister does not have a great deal of respect for my views, but I ask him honestly to listen carefully to what I have to say about the way in which directors operate. I understand what he is trying to do—although I do not think that he is going the right way about it—to help low-paid individuals, but the legislation will catch a lot of directors whom he has no intention of catching, and will cause an awful lot of problems for the courts.
The Government have rightly taken the view that genuinely self-employed people who contract to do work for an agreed price will make their best efforts to make a profit, but may not do so on every job. It would be ridiculous if a tradesman who had agreed to do a job for a particular price—£500, say—were to come back afterwards and say, "I'm sorry, Guy, but I've just worked out that I didn't get the minimum wage on this job, so you'll have to pay me more."
When we had the recession in the building industry, people were simply trying to keep in work and were not looking for a good return. The same often applies to directors. I know that, because I started my own company. I did not start it so that I could work for poverty wages, or to make a loss; I am a qualified work study engineer, and I had worked everything out and made all the plans.
I freely admit that I dared not show my bank manager how much I was losing, because he would have pulled the plug. When my first set of accounts was drawn up for 18 months of trading, I had not paid myself £1 an hour,


or 50p an hour, or even worked for nothing: it had cost me £9,000—a lot of money in those days—to work for myself for 18 months.
Many people find themselves in such a situation when they start companies. I do not seek sympathy from Labour Members—and I would certainly not get any—but I am trying to show that, when inspectors walk into a facility and try to find out whether the directors are paying themselves the minimum wage, they will get a terrible shock. I know that some Labour Members believe that people should not run companies and pay themselves less than the minimum wage, because they would be doing someone else out of a job. I am sure that some Labour Members would like the self-employed to be covered by the legislation for the same reason.
When someone sets up a business—it is difficult to understand until one does it oneself—it is very hard to find work and to make a profit. Often, one works long hours for no return. Labour Members are smiling, but they must have seen examples in their constituencies of people starting limited companies, a high proportion of which do not survive the first two or three years. That is not because the directors are paying themselves large sums.

Mr. Ian Stewart: They could go to an industrial tribunal.

Mr. Bruce: The hon. Gentleman is wrong about that. I shall describe how directors can get into difficulties when they do not pay themselves minimum wages. Companies have to have two directors and, in many cases, an individual who starts his own business also employs his wife. A couple might not want to tell people that they are earning low wages and that is not a problem, but what happens if the marriage breaks down, as often happens when people go into business together? The wife would be able to claim back from her husband minimum wages for working 40, 50 or 60 hours a week to get the business going.
The new clause on whether people who paid themselves wages were covered was not selected, but it is relevant to people who are directors. The industrial tribunal can be used as a debt collection agency between two people in a business, whether husband and wife or two separate directors. That happens in many limited companies.

Mr. Hammond: Does my hon. Friend agree that the greatest cause of concern is the lack of symmetry between the treatment of the self-employed and the directors of very small companies? To all practical intents, those two groups are in exactly the same position. Someone who is self-employed can pay himself as little or as much as he can afford, but someone who is a company director would be required by the Bill to pay himself the minimum wage. He would also be required to pay tax and national insurance on that salary and, if his business needed the cash flow, he would have to reinject that money as a net amount back into his business. That seems grossly unfair.

Mr. Bruce: That is unfair, and my hon. Friend's point goes to the nub of one of the additional problems that one faces when one runs a company. I shall come to that point later.
I have started several limited companies, some with people who were little known to me. We went into business together to try to make a profit. I do not wish to

identify the particular company because of what I am about to say, but in one instance, the director—who was working in partnership with me—and I decided to work for nothing to get the business up and running. That director spent large sums on expenses that should not have been spent and I took him to the small claims court. The business was wound up and I won the money back, which was paid in dribs and drabs.
Under the Bill, that director could have said that he had worked long hours—as he had—in a company that was not making any money. The deal was that we all shared in the profits and in the losses, and that company was making losses. That director would have been able to say that our agreement to set up and run the business meant that he must be paid by the business whatever the minimum wage was.

Mr. Frank Cook: The hon. Gentleman is throwing an interesting hypothesis at the House, but if his erstwhile colleague had made such a proposition, could he not have countered with a similar one on his behalf?

Mr. Bruce: That is possible, but such situations often involve one working director, who earns an agreed amount. I am familiar with such a case—I do not want to give too much detail—where one director worked in the company for 40 hours a week while the other came in to check what was happening. They fell out, and that case certainly got to the courts. The non-working director, who had no agreement to receive funds, could have argued that he was a director for at least 40 hours a week, checking and supervising, and could have claimed the minimum wage. The Minister never wanted to catch such people or get into this complication. It would be sensible to exclude such directors.
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I am a little concerned about my unpaid directorship of an all-party group of this House. If I took any income from the group, I would not be able to comment in the House about information technology; I do that free of charge, with no thought of anything coming to me. However, under the proposals, any expenses that I might claim as a director—a director cannot get away from his duties to a limited company—could mean that I was caught. I would have to charge a fee and would not be able to carry on with what I am doing.
I know that the House wants to move on, so I shall briefly consider amendment No. 70.

Mr. Hammond: Before my hon. Friend leaves the subject of company directors, has his study of the matter uncovered any reason why the Minister should not be prepared to exclude directors? The Minister has consistently rejected amendments that he considers would undermine the principle of the Bill, but directors of small companies are essentially self-employed.

Mr. Bruce: I have not found such a reason, but there is always a loophole. If some people were willing to work for lower wages, they could all be made directors of the company. I give the Minister that loophole. I had other examples involving problems with the redundancy payments legislation whereby directors were able, in


closing down companies, to claim from redundancy funds. A director who had not been paying himself money could, if his company went bust, argue that he was entitled to claim the minimum wage, put an invoice into the company for it and rely on the industrial courts to get it. He would create a debt that would be counted ahead of all the company's other debts.

Mr. Hammond: To add to my hon. Friend's point, I think that I am right to say that, if such a company went into receivership or liquidation, the Government would pick up the bill for unpaid wages. The directors' wages would be wages.

Mr. Bruce: I hope that the Minister is taking this on board, because we are trying to be helpful.
Briefly, I shall discuss the effect of wages councils and how we can learn from that in respect of the Bill. It is quite extraordinary that, when we mentioned the wages councils, the Minister dashed to the Dispatch Box and said that the reason why the Agricultural Wages Board was perfectly acceptable was that employers and employees had negotiated to come up with those minimum wages. The minimum wage for 16-year-olds is £1.84, for 18-year-olds £2.60 and for 19-year-olds £3.06.
The Government are telling us that they have put employers and employees on to a wages council, which will make recommendations to the Government, but why does the Minister—who defended wages councils up hill and down dale whenever the previous Government decided to remove them—believe that the group of people who have been charged with examining the minimum wage will not come up with exactly the same sort of figures? The reason why he does not want that to happen while the Bill is passing through the House is obvious: it is that Labour Back Benchers will be very upset.
This group contains many extremely sensible amendments, which have been wisely selected by Madam Speaker. The Minister would do well to look at our proposals and I hope that he will accept the amendments, or say that he will table amendments in the other place for consideration there.

Mr. Ian McCartney: We have had what I can only describe as a generally unfocused tour around what was basically a Second Reading debate so as to allow the right hon. Member for Wokingham (Mr. Redwood) to try to make a better speech than he made on Second Reading. Unfortunately, he was unable to do so.
I shall explain first the Government amendments to clauses 3 and 4 and then deal with the new clauses tabled by the hon. Member for South Cambridgeshire (Mr. Lansley) and the amendment tabled by my hon. Friend the Member for Preston (Audrey Wise) and her colleagues. By the end of my explanation, I hope to have gained the support of the House in what I am trying to achieve.
Amendments Nos. 21 to 23 do not alter the powers in clauses 3 and 4; instead, they clarify the relationship between the two clauses. In Committee, I explained exactly how the two clauses interact, but in the interests of absolute clarity we have tabled the amendments to explain how they work.
Clause 3 allows the Secretary of State to treat different persons differently by age if they are under 26. That is necessary to allow for a range of rates for different age groups below that age; for example, 16 to 18-year-olds, 19 to 21-year-olds and so on, if—I emphasise the word "if'—that is what is decided in the light of the Low Pay Commission's recommendations.
Clause 4 allows the Secretary of State to add further descriptions of persons to clause 3—for example, trainees, who may be 26 or over—again, in the light of the commission's recommendations. However, under clause 4, the Secretary of State may not differentiate by age. The reason for that is to ensure that the power in clause 4 is not used to set a number of different rates for those aged 26 and above; rather, the clause is intended to allow for a different rate, or an exemption, regardless of age.
The amendments remove any potential ambiguity and work in the following ways. Amendment No. 21 prevents any differentiation by age among those who are aged 26 or older by specifically ruling out such differentiation in clause 3. That is necessary for the sake of clarity, because clause 3 does not otherwise prevent different treatments for those of different ages. Amendments Nos. 22 and 23 make it clear that clause 4 refers only to those who have already attained the age of 26. That is simply good housekeeping. Clause 3 already allows different rates and exemptions for all or any of those under 26—subject, of course, to limitations on differentiating by reference to area, sector, size of company and so on. It follows that there is no point in allowing clause 4 to add descriptions of persons aged under 26 to clause 3, because they are already within clause 3.
Those are not difficult amendments. I hope that I made it clear in Committee how the Bill is constructed. It is entirely logical and recognises the need to allow for a number of possibilities, depending on what the commission has to say. In case any confusion remains, the amendments remove all doubt as to how the clauses relate to each other, and I urge the House to accept them.
New clauses 4 and 5 need not detain us for too long. A person who is a director of a company, limited or otherwise, will not be entitled to the national minimum wage. The Bill does not need to be so amended. The definitions in clause 52 make it quite clear who is covered by the Bill: directors are not workers and so are not covered. Of course, where a director is also an employee of the company, as some managing directors may be, he or she will be entitled to the national minimum wage owing to that contract of employment. The question of Ministers of the Crown was raised by, I think, the hon. Member for South Dorset (Mr. Bruce). He or she is an office holder, not an employee or worker, so is not covered.
New clause 10 deals with a complex area, and I have shown a great deal of sympathy towards it, but I shall explain why it is unacceptable and why I urge the House to oppose it. We discussed the difficult issue of severely incapacitated people and therapeutic earnings in Committee, and we reached some consensus. There is no case for exemption from, or modification of, the national minimum wage for disabled workers simply on the grounds of disability. We are awaiting the recommendations of the Low Pay Commission. If any recommendations were made on the grounds of disability, it would be possible for them to be considered under the powers in clauses 3 and 4. We shall wait to see the Low Pay Commission's report.
The Government's position has always been one of principle: there should be no grounds for not paying someone a minimum wage simply on the grounds of his or her incapacity. In addition, the Government are already taking measures, under the Disability Discrimination Act 1995, the access to work scheme and the supported employment programme to bridge the gap between what people with severe disabilities may be capable of earning and what they are, in practice, paid.
The Opposition's new clause 10 is overly bureaucratic and, through subsection (4), opens a loophole that could undermine the whole principle of the minimum wage. It refers to
a person
who
is…so affected…due to age or any other cause as to be incapable of earning the national minimum wage.
That is a potentially serious loophole that would invite unscrupulous employers to plead that their workers are incapable of earning a minimum wage and so should be exempted. That is unacceptable.
We have the flexibility that we need to deal with any issues that the Low Pay Commission raises in that context, so the new clause is unnecessary. Moreover, even if it is considered that there should be special provision for the disabled, the new clause goes about providing it in a way that is both wrong-headed and potentially damaging. I urge the House to oppose new clause 10.
Amendments Nos. 70 and 79 relate in some way to the minimum wage and young people. Before dealing with each amendment, I shall place them in the context of the Government's approach to encouraging young people into work. The national minimum wage is only one plank, albeit an important one, of the Government's overall strategy of encouraging people back to work and making work pay, and especially providing help for young people.
We have put together a raft of measures. The welfare-to-work programme addresses the problems faced by those without a job. Changes to the benefits system will help to build a sensible system of in-work benefits, where the taxpayer will not have to subsidise employers who are paying excessively low wages. The new deal for the young unemployed will give young people a number of routes to help them escape long-term unemployment. The Government are delivering on all of those measures.
Over and above that, my Department will consider fairness-at-work issues and employment status. All the initiatives are aimed at the same thing: getting young people into the work place, ending their exploitation and ensuring that they are trained for the challenges of the 21st century.
The Government have made it clear on a number of occasions why they have asked the Low Pay Commission to consider the subject of young people below the age of 26. Most countries with a minimum wage have some sort of special treatment for young people. The old wages councils used to have different rate for young people. Those entering the labour market for the first time are in a different position from other workers; the average wages paid to younger workers tend to be lower than those paid to older workers.
Some economic studies have found that, while a sensibly set minimum wage does not have an adverse effect on jobs as a whole, it may have an impact on jobs

for young people. That is why we asked the Low Pay Commission to consider the issue and why we cannot accept amendment No. 70.
Amendment No. 79 would narrow the scope of clause 3 so that the Secretary of State would have the power to determine a different rate or even exemption, but only for workers who have not attained the age of 18.
I should emphasise one point that should be perfectly clear, but is sometimes overlooked. Clause 3 exists because we may need to use it. It is a reflection of the remit given to the Low Pay Commission. I have already explained why I have asked the commission to consider the issue of young people and the minimum wage.
I say to my hon. Friends the Members for Preston and for Birmingham, Selly Oak (Dr. Jones) that we made it clear throughout the process that we undertook in opposition, in public debate and discussions, and in our consultations with trade unions and employers that the Low Pay Commission's remit would allow it to consider as widely as possible issues surrounding the application of the minimum wage—no less and no more than that. We have not attempted, privately or publicly, to put the Low Pay Commission in a straitjacket over recommendations about the rate of the national minimum wage or issues to do with training and young people. Before the general election, we gave a commitment that it would consider those matters and make recommendations.
Alongside our election manifesto, we published our minimum wage pledge to business, which made clear that our proposals for the national minimum wage would take account of the needs of young trainees and would not penalise occupational training activity. Before the election and since, our objectives have been to ensure that the Low Pay Commission has the flexibility to consider evidence on a range of issues and the capacity to make proposals to the Government.
9.45 pm
My hon. Friend the Member for Preston and her colleagues know of my long-standing commitment to the minimum wage and to ensuring that those in the workplace, whatever their age, do not suffer detriment at the hands of unscrupulous employers. The Bill's universality will maximise the number of workers who will be entitled to the national minimum wage: full-time, part-time, temporary, casual, agency and homeworkers and people who work for sub-contractors will be covered by the national minimum wage provisions.
After listening to what I have said about her amendment, I hope that my hon. Friend the Member for Preston will realise that my right hon. Friends and I are serious about passing legislation that will deal effectively with low pay issues. The legislation must be based on the Low Pay Commission's recommendations and on the Government's consideration of them. I repeat to my hon. Friend the absolute commitment that I gave in Committee: the Government will quickly make proposals based on the recommendations of the Low Pay Commission and put them to the House under the affirmative resolution procedure which will allow proper debate and accountability for those decisions. The Secretary of State will be required to explain a decision that is not completely in line with Low Pay Commission recommendations to the House.
I hope that my hon. Friend appreciates the strength of feeling with which I have made my remarks. The Government do not intend, as the right hon. Member for Wokingham suggested, to sneak measures past the House. Our view, in opposition and in government, has been that there should be the fullest debate on and accountability for the minimum wage, and that the House should take decisions on the rate and on other issues before the minimum wage rate is set.

Mr. Ian Bruce: I do not want the Minister to leave his dismissal of new clauses 4 and 5 where he did. Would a director who undertook no other work have a contract of employment under clause 52? That case could also be argued the other way. Surely the Minister is not saying that a company director will be excluded from the Bill's provisions if he is not also doing work for that company. We are trying to discover whether a person who decides to pay himself a lower rate under a contract of employment while a director will be excluded. Is the Minister saying that all directors will be excluded under clause 52?

Mr. McCartney: I thought that I had made it absolutely clear to the hon. Gentleman that, if directors are not workers they are not covered, except where they are an employee of the company as some managing directors are. They would be entitled to the minimum wage because they have contracts of employment. I cannot make it any clearer. The hon. Gentleman may not like the National Minimum Wage Bill, but we have been absolutely clear about where we stand on the issue of directors and definitions under clause 52.
The edifice that the hon. Gentleman has built up over the past hour and a half is a smokescreen for an attack on the national minimum wage. He has given no evidence this evening, and none was given in Committee, that demonstrate that clause 52 is defective in respect of directors. It is not defective. It is well targeted and gives rights to workers. In that context, a director is excluded.

Mr. Hammond: Does the Minister agree that most directors have a contract of service and that such people are specifically included in clause 52(3)(b)?

Mr. McCartney: That is a spurious point. Clause 52 does not cover directors because they are not designated as workers for the purposes of the Bill unless they are employees with a contract of employment. That is the clear position and I cannot make it any clearer.
Amendment No. 53 is another over-prescriptive measure of the type that we encountered many times in Committee. It would require the Secretary of State always to consult the Low Pay Commission and to follow its advice before adding any new categories of persons to clause 3. They would include, for example, potential candidates for exclusion or a modified rate of minimum wage.
The amendment is unnecessary. Before making the first regulations to set the minimum wage, the Secretary of State is required by clause 5(2)(e) to consult the Low Pay Commission on whether further classes of persons should be added to those in clause 3 who may be exempted or

subjected to a different rate. That is what we are already doing. I look forward to the Commission's report on this matter.
Under clause 6, there is nothing to prevent the Secretary of State from consulting the Low Pay Commission again on this issue in future. I would not find it surprising if the Secretary of State reconvened the commission to consider the possibility of further exemptions if that was what she had in mind. However, in some cases a full-scale consultation would be unnecessary: for example, if the commission had already covered similar ground in a previous report without reaching a firm recommendation. In such cases, why force a further consultation?
These issues are all rather abstract. The Government do not intend to scurry around trying to rake up every possible candidate for exemption, which is what the Opposition have been doing in Committee for the past few months. Our starting point is that the Bill should be universal and apply to all workers. I ask the House to reject the amendment.
Amendment No. 54 would enable the Secretary of State to make regulations to add not only new classes of persons to potential candidates for exemption or a modified rate in clause 3, but to take persons who had been added to clause 3 out of that clause so that they would no longer be potential candidates for exemption or a modified rate. For two reasons, such a power is unnecessary. The first is legal. Under the Interpretation Act 1978, anything that can be done can be undone, and there is no need to spell that out. The power in clause 4 to add persons to clause 3 encapsulates the power to take them out again.
The second reason is pragmatic. Putting a person in clause 3 simply makes him or her a potential candidate for exemption or for a different rate. To achieve that, new regulations would have to be made by the Secretary of State. It remains open to the Secretary of State never to make such regulations. That means that people in clause 3 would not need to be formally removed from the clause. The Secretary of State could simply choose not to make regulations exempting them or subjecting them to a different rate. For those reasons, amendment No. 54 is unnecessary, and I ask the House to reject it.
I hope that the debate so far has led to recognition by my right hon. and hon. Friends that the one simple thread running through the speeches of Conservative Members has been a desire to find any way to undermine the Bill. Once again they have been discredited beyond belief.
The former Secretary of State for Wales, the right hon. Member for' Wokingham, who has just returned to the Chamber, spent more than 20 minutes in spurious argument talking about why people in Britain should receive poverty pay and why there should be no floor to pay. He refused to say whether £1, 50p or 30p an hour was too little. Conservative Members would like people to work for nothing if that could be got away with, and that is why there will be a national minimum wage.

Mr. Redwood: Will the Minister tell the House what is too little in his judgment and in the Government's judgment? Perhaps he can answer his own question.

Mr. McCartney: The difference between the right hon. Gentleman and me is that I favour a national minimum wage and will implement it and he favours the continuation of low pay. That is why we set up the Low Pay Commission and why he has opposed its establishment tooth and nail. He has a record as long as


his arm in support of low-paying employers but, after tonight, the introduction of the national minimum wage will be a little nearer. A huge number of people in Britain will be thankful when, at last, a Labour Government implement a national minimum wage.

Mr. Lansley: I am grateful for the opportunity to respond to the debate. I am afraid that the Minister has signally failed to answer the debate in relation to new clause 4, which aims to exclude directors from the scope of the national minimum wage. His assertions that Conservative Members are trying to exclude people from the minimum wage have no bearing on new clause 4, because he himself says that he believes that the Bill already excludes directors from the national minimum wage. However, he has failed to answer points that were put forcefully by my hon. Friends. They have shown that clause 52 relates to people who either have a contract of employment or a contract of service. It is clear that company directors often have either of those.

Mr. Ian Bruce: My hon. Friend is not reading this completely. There is an implied contract of service. He is as familiar as I am with the Contracts of Employment Act 1963. People do not have to have a contract; it is implied by the fact that they are doing work for people.

Mr. Lansley: My hon. Friend is right. It is possible for the contract to be not only implied, but oral and implied. The intention of Ministers in clause 52 was to make the national minimum wage universal in its application. The notes on clauses that were supplied to the Standing Committee say that the clause is intended to be universal in its application. They explain that that does not include people who are described as "genuinely self-employed", but they do not refer to the fact that directors are excluded. The logic of the new clause is either to give effect to the Government's intentions or, if the Minister is wrong about clause 52, to give effect to what should be the Government's intentions.

Mr. Redwood: Can my hon. Friend explain why the Minister says Conservative Members have to answer what will be a satisfactory minimum wage when we have said that we favour a minimum income and we set out rates of that minimum income in office, yet the Minister, who believes in a minimum wage, is unable to tell us what minimum wage he finds acceptable? I find that difficult to understand. Has my hon. Friend worked it out?

Mr. Lansley: My right hon. Friend is absolutely right. The Minister has been hiding behind the polite fiction that this is all going to be left to the Low Pay Commission. If it were all left to the commission, clauses 3 and 4 would be written differently; they would allow the commission to vary the minimum wage by reference to area, occupation or otherwise, but that is not what Ministers want. The Minister has said that he has not led the commission at all, but anyone who reads paragraph 66 of the Government's evidence to the commission will know that the Government want it to specify a lower national minimum wage rate for people under the age of 26 and not to specify a training rate.
The Government have signally failed to answer the points that have been made about new clause 4, which would give effect to what the Minister says are his

intentions—although he has not explained how the Bill currently achieves them. For that reason, I invite my colleagues to join me in pressing new clause 4 to a Division.

Question put, That the clause be read a Second time:—

The House divided: Ayes 126, Noes 325.

Division No. 193]
[9.57 pm


AYES


Ainsworth, Peter (E Surrey)
Key, Robert


Arbuthnot, James
Kirkbride, Miss Julie


Baldry, Tony
Laing, Mrs Eleanor


Bercow, John
Lait, Mrs Jacqui


Beresford, Sir Paul
Lansley, Andrew


Boswell, Tim
Leigh, Edward


Bottomley, Peter (Worthing W)
Letwin, Oliver


Brady Graham
Lewis, Dr Julian (New Forest E)


Brazier, Julian
Lidington, David


Brooke Rt Hon Peter
Lloyd, Rt Hon Sir Peter (Fareham)


Browning, Mrs Angela
Luff, Peter


Bruce Ian (S Dorset)
MacGregor, Rt Hon John



McIntosh, Miss Anne


Burns, Simon
MacKay, Andrew


Cash. William
Maclean, Rt Hon David


Chapman, Sir Sydney
McLoughlin, Patrick


(Chipping Barnet)
Malins, Humfrey


Chope, Christopher
Maples, John


Clappison, James
Mawhinney, Rt Hon Sir Brian


Clark, Rt Hon Alan (Kensington)
May, Mrs Theresa


Clark, Dr Michael (Rayleigh)
Moss, Malcolm


Clarke, Rt Hon Kenneth
Nicholls, Patrick


(Rushcliffe)
Norman, Archie


Clifton-Brown, Geoffrey
Page, Richard


Collins, Tim
Paice, James


Colvin, Michael
Pickles, Eric


Cormack, Sir Patrick
Prior, David


Cran, James
Randall, John


Curry, Rt Hon David
Redwood, Rt Hon John


Davies, Quentin (Grantham)
Robathan, Andrew



Robertson, Laurence (Tewk'b'ry)


Davis, Rt Hon David (Haltemprice)



 Day, Stephen
Roe, Mrs Marion (Broxbourne)



Rowe, Andrew (Faversham)


Duncan, Alan
David, Ruffley


Duncan Smith, lain
St Aubyn, Nick


Evans, Nigel
Sayeed, Jonathan


Faber, David
Shephard, Rt Hon Mrs Gillian


Fallon, Michael
Shepherd, Richard


Flight, Howard
Simpson, Keith (Mid-Norfolk)


Forth, Rt Hon Eric
Soames, Nicholas


Fowler, Rt Hon Sir Norman
Spelman, Mrs Caroline


Garnier, Edward
Spicer, Sir Michael


Gibb, Nick
Spring, Richard


Gill, Christopher
Steen, Anthony


Gillan, Mrs Cheryl
Streeter, Gary


Gorman, Mrs Teresa
Swayne, Desmond


Gray, James
Syms, Robert


Greenway, John
Tapsell, Sir Peter


Grieve, Dominic
Taylor, Ian (Esher & Walton)


Gummer, Rt Hon John
Taylor, Sir Teddy


Hague, Rt Hon William
Townend, John


Hamilton, Rt Hon Sir Archie
Trend, Michael



Tyrie, Andrew Ty


Hammond, Philip
Viggers, Peter


Hayes, John
Walter, Robert


Heald, Oliver
Wardle, Charles


Heathcoat-Amory, Rt Hon David
Waterson, Nigel


Hogg, Rt Hon Douglas
Wells, Bowen


Horam, John
Whitney, Sir Raymond


Hunter, Andrew
Whittingdale, John


Jackson, Robert (Wantage)
Widdecombe, Rt Hon Miss Ann


Jenkin, Bemard
Wilkinson, John


Johnson Smith,
Willetts, David


Rt Hon Sir Geoffrey
Winterton, Mrs Ann (Congleton)






Winterton, Nicholas (Macclesfield)
Tellers for the Ayes:


Woodward, Shaun
Sir David Madel and


Yeo, Tim
Mr. John M. Taylor.


Young, Rt Hon Sir George



NOES


Adams, Mrs Irene (Paisley N)
Corbyn, Jeremy


Ainger, Nick
Corston, Ms Jean


Ainsworth, Robert (Cov'try NE)
Coffer, Brian


Allan, Richard
Cox, Tom


Allen, Graham
Crausby, David


Anderson, Janet (Rossendale)
Cryer, Mrs Ann (Keighley)


Ashdown, Rt Hon Paddy
Cryer, John (Hornchurch)


Ashton, Joe
Cunningham, Jim (Cov'try S)


Atkins, Charlotte
Dalyell, Tam


Baker, Norman
Davey, Valerie (Bristol W)


Banks, Tony
Davidson, Ian


Barnes, Harry
Davies, Rt Hon Denzil (Llanelli)


Battle, John
Davies, Geraint (Croydon C)


Bayley, Hugh
Davies, Rt Hon Ron (Caerphilly)


Beard, Nigel
Davis, Terry (B'ham Hodge H)


Beckett, Rt Hon Mrs Margaret
Dawson, Hilton


Begg, Miss Anne
Denham, John


Bell, Martin (Tatton)
Dismore, Andrew


Bell, Stuart (Middlesbrough)
Dobbin, Jim


Benn, Rt Hon Tony
Dobson, Rt Hon Frank


Benton, Joe
Donohoe, Brian H


Bermingham, Gerald
Doran, Frank


Berry, Roger
Drew, David


Best, Harold
Eagle, Angela (Wallasey)


Betts, Clive
Eagle, Maria (L'pool Garston)


Blears, Ms Hazel
Efford, Clive


Blizzard, Bob
Ennis, Jeff


Bradley, Keith (Withington)
Etherington, Bill


Bradshaw, Ben
Field, Rt Hon Frank


Brake, Tom
Fisher, Mark


Brand, Dr Peter
Fitzpatrick, Jim


Breed, Colin
Fitzsimons, Lorna


Brinton, Mrs Helen
Flint, Caroline


Brown, Rt Hon Nick (Newcastle E)
Flynn, Paul


Brown, Russell (Dumfries)
Follett, Barbara


Browne, Desmond
Foster, Don (Bath)


Bruce, Malcolm (Gordon)
Foster, Michael Jabez (Hastings)


Burden, Richard
Foster, Michael J (Worcester)


Burgon, Colin
Foulkes, George


Burnett, John
Fyfe, Maria


Butler, Mrs Christine
Gardiner, Barry


Byers, Stephen
George, Bruce (Walsall S)


Caborn, Richard
Gerrard, Neil


Campbell, Mrs Anne (C'bridge)
Gibson, Dr Ian


Campbell, Menzies (NE Fife)
Gilroy, Mrs Linda


Campbell, Ronnie (Blyth V)
Godsiff, Roger


Canavan, Dennis
Goggins, Paul


Caplin, Ivor
Gordon, Mrs Eileen


Casale, Roger
Gorrie, Donald


Caton, Martin
Griffiths, Jane (Reading E)


Cawsey, Ian
Griffiths, Nigel (Edinburgh S)


Chapman, Ben (Wirral S)
Griffiths, Win (Bridgend)


Chaytor, David
Grocott, Bruce


Chidgey, David
Gunnell, John


Church, Ms Judith
Hain, Peter


Clapham, Michael
Hall, Mike (Weaver Vale)


Clark, Paul (Gillingham)
Hamilton, Fabian (Leeds NE)


Clarke, Eric (Midlothian)
Hanson, David


Clarke, Rt Hon Tom (Coatbridge)
Healey, John


Clarke, Tony (Northampton S)
Henderson, Doug (Newcastle N)


Clelland, David
Hepburn, Stephen


Clwyd, Ann
Heppell, John


Coaker, Vernon
Hesford, Stephen


Coffey, Ms Ann
Hewitt, Ms Patricia


Cohen, Harry
Hill, Keith


Coleman, Iain
Hinchliffe, David


Colman, Tony
Hoey, Kate


Connarty, Michael
Home Robertson, John


Cook, Frank (Stockton N)
Hoon, Geoffrey


Corbett, Robin
Hope, Phil





Hopkins, Kelvin
Morris, Ms Estelle (B'ham Yardley)


Howarth, George (Knowsley N)
Morris, Rt Hon John (Aberavon)


Howells, Dr Kim
Mountford, Kali


Hoyle, Lindsay
Mudie, George


Hughes, Ms Beverley (Stretford)
Mullin, Chris


Hughes, Kevin (Doncaster N)
Murphy, Denis (Wansbeck)


Hughes, Simon (Southwark N)
Murphy, Jim (Eastwood)


Humble, Mrs Joan
Naysmith, Dr Doug


Hutton, John
Norris, Dan


Iddon, Dr Brian
Oaten, Mark


Jackson, Ms Glenda (Hampstead)
O'Brien, Bill (Normanton)


Jackson, Helen (Hillsborough)
O'Brien, Mike (N Warks)


Jamieson, David
O'Hara, Eddie


Jenkins, Brian
Olner, Bill


Johnson, Alan (Hull W & Hessle)
O'Neill, Martin


Johnson, Miss Melanie (Welwyn Hatfield)
Öpik, Lembit


Jones, Helen (Warrington N)
Organ, Mrs Diana


Jones, leuan Wyn (Ynys Môn)
Osborne, Ms Sandra


Jones, Jon Owen (Cardiff C)
Pearson, Ian


Jones, Dr Lynne (Selly Oak)
Pendry, Tom


Jones, Nigel (Cheltenham)
Perham, Ms Linda


Jowell, Ms Tessa
Pickthall, Colin


Keeble, Ms Sally
Pike, Peter L


Keen, Ann (Brentford & lsleworth)
Plaskitt, James


Keetch, Paul
Pond, Chris


Kelly, Ms Ruth
Pound, Stephen


Kennedy, Charles (Ross Skye)
Prentice, Ms Bridget (Lewisham E)


Kennedy, Jane (Wavertree)
Prentice, Gordon (Pendle)


Khabra, Piara S
Prescott, Rt Hon John


King, Andy (Rugby & Kenilworth)
Primarolo, Dawn


King, Ms Oona (Bethnal Green)
Prosser, Gwyn


Kumar, Dr Ashok
Purchase, Ken


Lawrence, Ms Jackie
Quin, Ms Joyce


Laxton, Bob
Quinn, Lawrie


Leslie, Christopher
Radice, Giles


Lewis, Ivan (Bury S)
Rammell, Bill


Linton, Martin
Rapson, Syd


Livingstone, Ken
Raynsford, Nick


Livsey, Richard
Reed, Andrew (Loughborough)


Lloyd, Tony (Manchester C)
Reid, Dr John (Hamilton N)


Llwyd, Elfyn
Rendel, David


Lock, David
Robertson, Rt Hon George (Hamilton S)


Love, Andrew
Roche, Mrs Barbara


McAllion, John
Rooker, Jeff


McAvoy, Thomas
Rooney, Terry


McCabe, Steve
Rowlands, Ted


McCafferty, Ms Chris
Ruane, Chris


McCartney, Ian (Makerfield)
Ruddock, Ms Joan


McDonagh, Siobhain
Russell, Bob (Colchester)


Macdonald, Calum
Russell, Ms Christine (Chester)


McDonnell, John
Ryan, Ms Joan


McFall, John
Sanders, Adrian


McGuire, Mrs Anne
Sarwar, Mohammad


McIsaac, Shona
Savidge, Malcolm


McLeish, Henry
Sawford, Phil


McNamara, Kevin
Sedgemore, Brian


McNulty, Tony
Sheerman, Barry


Mactaggart, Fiona
Sheldon, Rt Hon Robert


McWalter, Tony
Singh, Marsha


Mallaber, Judy
Skinner, Dennis


Marek, Dr John
Smith, Rt Hon Andrew (Oxford E)


Marsden, Paul (Shrewsbury)
Smith, Angela (Basildon)


Marshall—Andrews, Robert
Smith, Rt Hon Chris (Islington S)


Meacher, Rt Hon Michael
Smith, Miss Geraldine (Morecambe & Lunesdale)


Merron, Gillian
Smith, Jacqui (Redditch)


Michael, Alun
Smith, John (Glamorgan)


Michie, Bill (Shef'ld Heeley)
Snape, Peter


Michie, Mrs Ray (Argyll & Bute)
Soley, Clive


Milburn, Alan
Southworth, Ms Helen


Miller, Andrew
Spellar, John


Mitchell, Austin
Squire, Ms Rachel


Moonie, Dr Lewis
Starkey, Dr Phyllis


Moran, Ms Margaret
Steinberg, Gerry


Morgan, Rhodri (Cardiff W)
Stewart, David (Invemess E)


Morley, Elliot







Stewart, Ian (Eccles)
Walley, Ms Joan


Stinchcombe, Paul
Wareing, Robert N


Stoate, Dr Howard
Webb, Steve


Strang, Rt Hon Dr Gavin
White, Brian


Straw, Rt Hon Jack
Wicks, Malcolm


Stringer, Graham
Wigley, Rt Hon Dafydd


Stuart, Ms Gisela
Williams, Rt Hon Alan (Swansea W)


Sutcliffe, Gerry
Williams, Alan W (E Carmarthen)


Taylor, Rt Hon Mrs Ann (Dewsbury)
Williams, Mrs Betty (Conwy)


Thomas, Gareth (Clwyd W)
Wills, Michael


Todd, Mark
Winnick, David


Touhig, Don
Winterton, Ms Rosie (Doncaster C)


Truswell, Paul
Wise, Audrey


Turner, Dennis (Wolverh'ton SE)
Wood, Mike


Turner, Dr Desmond (Kemptown)
Woolas, Phil


Turner, Dr George (NW Norfolk)
Wright, Anthony D (Gt Yarmouth)


Twigg, Stephen (Enfield)



Tyler, Paul
Tellers for the Noes:


Vis, Dr Rudi
Mr. Greg Pope and


Wallace, James
Mr. Jim Dowd.

Question accordingly negatived.

BUSINESS OF THE HOUSE

It being after Ten o'clock, further consideration of the Bill stood adjourned.

Motion made, and Question put forthwith, pursuant to Standing Order No. 15 (Exempted business),
That, at this day's sitting, the National Minimum Wage Bill may be proceeded with, though opposed, until any hour.—[Mr. Betts.]

Question agreed to.

As amended (in the Standing Committee), again considered.

New clause 8

POWER OF SECRETARY OF STATE TO SUSPEND THE NATIONAL MINIMUM WAGE IN THE CASE OF NATIONAL OR LOCAL ECONOMIC EMERGENCIES

'—.(1) The Secretary of State, after such consultation with the Low Pay Commission as may be reasonably practicable, may by order suspend the operation of this Act if he is satisfied that such suspension is required in the public interest by extreme economic circumstances.

(2) An order under subsection (1) may provide for the operation of this Act to be suspended in whole or in part and, in particular, may provide for the provisions of this Act to be suspended in respect of—

(a) any area or description of area; or
(b) any individual employer.

(3) No order shall be made under subsection (2)(b) above unless the employer has given the Secretary of State not less than 30 days' notice in such form as may be prescribed that, in the opinion of the employer, such an order is necessary in order to prevent the loss of jobs.

(4) A statutory instrument containing an order under this section shall be laid before Parliament after being made.

(5) Unless an order under this section is approved by resolution of each House of Parliament before the end of the period of 28 days beginning with the day on which it is made, it shall cease to have effect at the end of that period.

(6) In reckoning the period of 28 days for the purposes of subsection (3), no account shall be taken of any time during which Parliament is dissolved or prorogued or during which either House is adjourned for more than 4 days.

(7) An order under this section which does not cease to have effect before the end of the period of 3 months beginning with the day on which it is made shall cease to have effect at the end of that period.'—.[Mr. Boswell.]

Brought up, and read the First time.

Mr. Boswell: I beg to move, That the clause be read a Second time.
The new clause provides for the suspension of the national minimum wage in the event of national or local economic emergencies. It is, perhaps, rather better drafted than one or two—[Interruption.]

Madam Speaker: Order. The House must come to order.

Mr. Boswell: The new clause is, perhaps, rather better drafted than some Opposition new clauses have been over the years, not just because of the admirable assistance of the Clerks' Department but because there is a clear precedent in legislation that is being considered even now. We owe the reference to "extreme economic circumstances" to the Bank of England Bill. I am not sure that I would have used that phrase in drafting legislation, but the Government seem comfortable with it and use it as a legal base, so we have copied it.
In offering the Government new clause 8, I hope that the Minister of State will accept our bona fides. He has consistently suggested—in Standing Committee and subsequently—that we are seeking to belittle his Bill, subvert it or denude it of content. In fact, we are providing for the Secretary of State an enhanced set of powers to use in particular circumstances. They are precedented, and the ability to make use of them would be beneficial to any Secretary of State of whatever party.
10.15 pm
I mentioned that the powers provided under the new clause are based on those in the Bank of England Bill, but they differ in a number of particulars. First, because they have a separate application, subsection (1) suggests that the Secretary of State should hold
such consultation with the Low Pay Commission as may be reasonably practical".
I suppose that is a lawyer's term of art—not that I am a lawyer—but it is the nearest we can get to recommending to the Secretary of State to take the advice of her or his Low Pay Commission, even in difficult circumstances and at short notice, and, if it is possible, not to go ahead without having done that.
Secondly, the new clause provides not merely for a global suspension of the entire concept of a national minimum wage under the emergency powers, but for partial suspension in particular circumstances.
It is clear that the exact circumstances under which emergency powers should be invoked to suspend the national minimum wage were not clear at the time of our drafting the new clause; nor could they be—an argument which the Government used to their advantage or to convince the Standing Committee considering the Bank of England Bill, by saying that it would be unreasonable to specify the circumstances in which emergency powers would be invoked.
I should like to offer the House two examples—one is historic and the other is by analogy. Dealing first with the historic one, it will be in the memory of a number of right hon. and hon. Members—and in my memory as, at the time, I was a researcher for the Conservative party—that


when Lord Healey was Chancellor of the Exchequer, he was about to go to Heathrow airport to fly to an international meeting when he was summoned back because, sadly for him and perhaps less sadly for the economy in the disturbed circumstances of 1976, the International Monetary Fund was summoned in. The boys in blue—the bailiffs—arrived to sort out the British economy. I realise that it is a painful memory for Labour Members, and I would not wish to claim that they have a monopoly on economic difficulties, although it sometimes seems that way.

Mr. Clive Betts: What about the exchange rate mechanism?

Mr. Boswell: I wondered whether the hon. Gentleman would be alert enough to refer to that; in a sense, he makes my point for me. Any economic difficulty may arise, and although I anticipate—perhaps sooner than we expect—the early return of a Conservative Government, nevertheless I would not wish to say that any future Government would be insulated from the laws of economics. That shows that Governments get into economic difficulties, which might include pressure on resources and for a restraint in wages to retain the competitiveness of the UK economy.

Mr. Eric Forth: When my hon. Friend expands further, as I hope he will, on the possible circumstances in which his excellent provision may be invoked, will he dwell on the possibility of our joining a single European currency and perhaps a version of the exchange rate mechanism before that? Does he believe that the economic pressures involved could bring about an invocation of the measure to protect elements of our domestic economy, particularly our employment?

Mr. Boswell: My right hon. Friend is incredibly perceptive. The next part of my speech addresses that point. He and I may not always agree in every particular on matters European—although we often find ourselves on the same side of the argument. I was about to share with the House my concern that our complete adoption of the single European currency could result in turbulence across the exchanges. That could also be a repercussive effect of the adoption of the euro by other member states. Both situations could have a disturbing effect.
After the Monetary Policy Committee's decision last week—to the surprise of some—not to put interest rates up, the pound broke through the DM3 barrier again. As the likelihood of the euro among the eleven firms up between now and May and as we continue with an apparently restrictive monetary policy, particularly if it is not buttressed with other measures in the Budget—I leave those for the consideration of my Treasury colleagues—there could be a runaway escalation in British exchange rates, which would be highly damaging for our competitiveness. Conversely, if we joined a single currency in due course, we might find it difficult to sustain our exchange rate. We would have to take the strain through higher unemployment, because there would be no exchange rate mechanism to correct the situation as we lost competitiveness.
The analogy with the forced monetary union of East Germany with the federal republic in 1990, after the fall of the wall, makes the point of my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) eloquently. It is an awful warning to those who advocate exchange rate unity by fiat, assuming that the problems can be blown away by uniting currencies, that, almost overnight, East Germany lost even those parts of its productive industry that were relatively competitive. It has had a high, sustained and rising unemployment rate, buttressed by huge monetary and budgetary transfers. Unemployment is still rising, and is currently hovering around 20 per cent.
That is not satisfactory, and I do not advocate it. We are proposing that, in extreme economic circumstances—within the euro or outwith it—it should be possible, after consultation, to suspend the operation of the national minimum wage.

Mr. Rowe: Does the definition of extreme economic circumstances include going to war? The likelihood of such an activity seems to be growing rather than diminishing.

Mr. Boswell: Having strayed into matters related to economic policy, I am not sure that I also wish to dilate on matters relating to foreign policy, except to say that I share some of my hon. Friend's concerns. The news tonight about the Balkans was particularly disturbing. Historically, the outbreak of widespread war has led to rapid changes in bank rates and might be exactly the extreme economic circumstances which would be addressed by the new clause.
I repeat that there is no blueprint for the kind of emergency which is envisaged. We are arguing that a wise and prudent Government, of whatever colour, should equip themselves with a mechanism that could handle such changes. I am genuinely frightened that the national minimum wage, at whatever rate it is set, may impose a cost structure in which a shock would render our economy uncompetitive, and our unemployment would soar through the roof. Nobody wants that; the Government do not intend it. We are trying to provide a bottom line which would avoid it.
I turn to the other element of the new clause which differs from the analogous situation under the Bank of England Bill, to which I have referred. Given that, according to the Government, there is to be a national minimum wage, applicable, without discrimination, by area, by sector of employment, by undertakings of different size, by persons of different ages or by classes of different occupations, the minimum wage—at least when it started out on Second Reading—was to be a universal national minimum wage, with the possibility of different rates for persons under 26, to which we shall return.
Given that that is what the Government intended, we have been arguing—in a way which I know the Minister thinks is subversive to the whole principle—that Governments, in due humility, should be prepared to consider exceptions if those are appropriate. The Government should think long and hard if there is to be a trade-off between their amour propre, in saying that there should be a single universal national minimum wage, and the consequence of a high and rising systematic rate of unemployment in a particular area or industry.
New clause 8(2) considers the possibility of a suspension in part. There are two possible tests for that. One is by area, and I shall deal with that first. As we said in Committee—I do not say this as a prediction, because, as the Minister and the Under-Secretary know, the facts show the following comparison is the greatest economic divergence—the economy of Northern Ireland has a very different costs and wage structure from other parts of the United Kingdom. It is not unique in that; it is only a little behind the north-east of England, but it is an extreme in comparison with Greater London.
The extreme is so apparent: on average, wages in Northern Ireland are 60 per cent. of those in Greater London. The bottom decile of employment in Northern Ireland yields a rate of £3.50 an hour. In London, the figure is £4.72. That marks not only the metropolitan centres of Belfast and London, which have highly capitalised industries. It also includes the impact in rural areas where there is much higher unemployment, greater seasonality of employment, and certain trades, such as hospitality and agriculture, which, historically, tend to pay lower rates.
Suspension should be provided for in case the Government find that, in the end, a single national minimum rate causes high unemployment because the rate will have been bid up in sensitive areas such as Northern Ireland and the north-east of England.
The area need not be as big as a province or a region. We might debate—and, in a different context, we have debated extensively—the concept of regional development agencies. I find it a little distasteful that my regional capital, if I may call it that, of Nottingham, a city which I like, is 100 miles from my home—the journey does not require me to leave the east midlands region significantly, if at all—whereas I live much nearer to the centre of London, and to this place, than I do to Nottingham. Perhaps economic regions are too wide for the purposes of the new clause.
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However, if we were considering areas, which are not specified in detail in new clause 8, we might consider development areas, assisted areas, objective 1 areas, objective 2 areas or objective 5b areas. By definition, those areas are likely to be subject to the greatest economic pressure.
I was disturbed, but not wholly surprised, to read in today's newspaper that Mrs. Wulf-Mathies, the European Commissioner who deals with the structural funds, has outlined a rather dusty scenario for our future regional assistance. If we are to lose European funds, we may well find the pressures on employment in some parts of the country even more intense.
The second provision in subsection (2) of the new clause allows for a suspension in respect of "any individual employer." I emphasise that this is not simply a matter of an employer waking up in the morning and saying, "I do not like the national minimum wage. I do not feel like paying it to my staff." It would be clearly linked by subsection (3) to a formal notice in an approved form to the Secretary of State, prescribing that, in the opinion of the employer, such an order was necessary to prevent the loss of jobs. The concept would bear a close similarity to the idea of the statutory notification of

impending redundancies, and although I have an open mind on the subject, I believe that it might be appropriate to combine the two into one process.
Ministers continue to say, without telling us what the national minimum wage will be, that there will be no problem if the national minimum wage is sensibly struck. That is a circular argument, if ever I heard one. While they continue to say that everything will be all right in this new economic Britain to which we are all pointed, and to which the Bill points us, in the real world some employers will feel the pinch. There will be employers whose businesses may be destroyed by the national minimum wage. Not only will their businesses go, but the employment opportunities that they offer their staff will go.

Mr. Forth: I confess that, although I am impressed by my hon. Friend's argument, I am slightly surprised that he has not included in new clause 8 a reference to a business sector. He has covered the concept of area and is now discussing the possibility of individual employers being affected by the national minimum wage. Has he considered that a whole sector may be appropriate for such treatment? I have in mind, for example, a heavily export-oriented sector, especially adversely affected by an exchange rate movement, or perhaps a sector that has been affected by a change in the competitive environment—in a competitive trading nation, or another such factor. Did my hon. Friend consider that as a possibility, and did he consciously decide not to include it in the provisions of his new clause?

Mr. Boswell: Not for the first time, my right hon. Friend almost anticipates me. I could have done as he suggests, but I was conscious of the Government's doctrine that there is to be no differentiation by sector or area generally. Therefore, I was conscious that it might be appropriate, particularly as we should like to help the Government and we want them to adopt our new clause or something like it, to provide for only a limited power—one that would be keyed either to defined areas or to particular firms experiencing difficulty.
If a sector—motor cars, for example—were experiencing difficulties, one would not need to go through many manufacturers. If the component industry were added in, there would be more, and it would be possible to specify a group of manufacturers by listing them, provided that they were prepared to produce the sort of certificate that the clause would require.
My right hon. Friend is on a good point, which is that changing economic circumstances and an economic shock could have a disproportionate effect on a particular industry. His example is better than the one that I would have cited, because he is considering the shock effects of, for example, a change in exchange rates. I might also have added the possibilities of pressure on a whole industry, had I wanted to go for a sectoral solution. For example, certain industries will experience pressure under the national minimum wage, including catering and hospitality, hairdressing, aspects of horticulture and so forth.

Mr. John Hayes: As my hon. Friend mentioned agriculture in his response to my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth), may I draw his attention to the


double effect on horticulture of pressure from the strong pound on exports coupled with the need for labour flexibility? I am thinking of seasonal work, part-time work and occasional work—all things with which he will be familiar as an expert in that field. In my constituency, the minimum wage in horticulture could have a damaging effect because of that dual threat.

Mr. Boswell: My hon. Friend is a formidable advocate for his constituency, with its huge and significant horticultural interests. He is right to point to the fact that horticulture is already under one severe threat from exchange rates, which would be compounded to a double whammy with a second threat from a national minimum wage. I am not giving him the whole solution in the new clause, because the suspension would have to happen ex-post in the case of an immediate threat to jobs. However, it would provide a mechanism if the scenario that the Government do not believe could happen did occur. It would be appropriate for such a situation.

Mr. Lansley: My hon. Friend is kind in giving way. He amply answered my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth). Before he moves on, will he recognise that it is possible to think in terms of a number of employers in an industry together, and that that sort of example fits well with the concept in the European Community of an industry being in manifest crisis? From the view of managing those economic circumstances, is it not more advantageous to enable those employers temporarily to reduce costs rather than require the Exchequer to engage temporarily in an additional subsidy?

Mr. Boswell: My hon. Friend makes two valuable points. First, he reminds the House of the concept of a manifest crisis as a term of art for an industry that is facing severe problems, probably internationally. Secondly, he makes the appropriate point that it is better to keep people in work and out of benefit—I believe that new Labour is supposed to favour that—and to keep businesses flourishing, rather than let them break down, go bust and have to be bailed out, or effectively compensated, by the Exchequer for what has happened. He is right.
The new clause envisages an emergency, when time will be short. A Government could—perhaps the Government would want to do this if any such circumstance were to arise—publish draft regulations that would be subject to the affirmative resolution procedure. They may even be able to consult the Low Pay Commission before doing so. The new clause, however, would provide for a negative procedure: an order would be made, it would be laid before Parliament, and if it was not approved within 28 days it would be void. Under the emergency provisions set out in the new clause, the order could not continue for more than three months, in any case, even if it was approved by the House.

Mr. David Maclean: Will my hon. Friend say whether there is anything in the new clause that would compel the Government to use the order-making power? Given that the Bill already contains order-making powers—in clauses 39 and 49,

for example—and that most of the Government's legislation is littered with powers for Secretaries of State to make orders in certain circumstances, can he think of a good reason why the Government should reject a further order-making power, which they can use at their discretion when they determine?

Mr. Boswell: My right hon. Friend makes a seductive case. We are offering the new clause to the Government on a plate, as an appropriate ancillary to the powers that they have already included in the Bill. I could not agree more on his general point—frankly, if there were no orders in the Bill, there would be no Bill at all. The Bill depends entirely on regulations, and we do not know what will be in them, as we do not know what the Low Pay Commission will say—and the Government will not tell us. When the Government tell us, we shall know and we shall be able to debate the matter, which is an odd way in which to go on.

Mr. Rowe: I have not had the opportunity to study the Bill in as much detail as my hon. Friend has, and I am not absolutely clear about this issue. On occasions, individual firms and, indeed, sectors of industry have come together and asked whether they could take a cut in wages to tide them over a particular problem.

Mr. Maclean: Like the Cabinet.

Mr. Rowe: Am I right in thinking that that would be illegal under the Bill?

Mr. Boswell: I am not sure that I would use the word "illegal"—it would depend whether an order was made or an offence was created. I think that, ultimately, such actions probably would be illegal if they were persisted in. I heard my right hon. Friend the Member for Penrith and The Border (Mr. Maclean) commenting, as an aside, on the activities of the members of the Cabinet, who recently clubbed together in not taking their salary increases. Such actions would also be inconsistent with the power that is set out later in the Bill, under which it will be possible, as part of bailing out a dispute in a conciliation agreement, to allow for a lower rate to have been paid.
My hon. Friend the Member for Faversham and Mid-Kent (Mr. Rowe) makes a valuable point. If trade unions, for example, are faced with the stark choice between jobs and high pay leading to no jobs, they may settle for lower pay to retain their jobs.
The most flexible labour markets, such as the one in the United States which, I concede immediately, has a modest national minimum wage—[Interruption.] It is very much lower than what the Low Pay Commission or the Government are likely to propose. In the United States, which has a flexible labour market, such trade-off bargaining between job possibilities and wages happens extensively.

Mr. Forth: I want to press my hon. Friend on the point that our hon. Friend the Member for Faversham and Mid-Kent (Mr. Rowe) made. It strikes me as distinctly possible that a company—or indeed an industry or a sector—could find that the only way in which it could protect its work force was to negotiate a voluntary pay reduction that could take the lower-paid below the minimum rate.
I well recall that, many years ago when I worked in industry, a Swiss firm that supplied my company did exactly that. It negotiated a pay reduction across the board, to protect all the jobs. That successful strategy made a great impression on me. If the new clause is not accepted, there will be a distinct danger of denying that sensible course not only to employers but, more important, to employees. Does my hon. Friend share my interpretation and my worry?

Mr. Boswell: Yes, and yes.

Mr. Bercow: Will my hon. Friend give way?

Mr. Boswell: I will, but for the very last time.

Mr. Bercow: I am most grateful to my hon. Friend, whose forbearance under provocation is always admirable.
Further to the point made by our right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth), does my hon. Friend agree that it would be especially extraordinary if the Government were to decline to agree to a suspension of the terms of the legislation in a case in which a public sector employer and a public sector union agreed that that eventuality was desirable? The Government would be punishing themselves and failing to afford themselves the opportunity offered by both the employer and the employees' representative.

Mr. Boswell: My hon. Friend piles Pelion on Ossa, as they say. He merely intensifies the point. The Government will probably want to say that there is absolutely no question of the Chancellor of the Exchequer so ordering the nation's finances as to require any part of the public sector to pay poverty wages, as they would define them, but such a situation could easily arise given the large proportion of people in the care sector who are either directly or indirectly influenced by public sector settlements.
I might have got on a little better if, instead of simply describing a circumstance in which there had to be a redundancy notification to the Secretary of State, we had further provided for a trade union seal of good housekeeping in the new clause. Perhaps we should have added a provision saying, "as a result of a collective agreement between a recognised trade union and employers' organisation to take a lower rate than the national minimum wage". That might have got the new clause past the Government.
In all humility—the humility that they claim for themselves and deny to us—the Government should admit that, from time to time, Governments will run into difficulties nationally, and that, if that happens, there should be a mechanism for suspending the minimum wage, if Ministers consider, after taking advice, that that is the sensible course. That is even more likely to happen locally, or in relation to one or two firms or industries.
I am happy for any necessary safeguards to be put in place—if it makes it more palatable for the Government to put in a reference to trade unions, I would go along with that—but it would be wise to provide a safety valve,

as was done in the Bank of England Bill. If the Government are not prepared to accept the new clause, they must explain why.

Mr. Forth: My hon. Friend seems to be coming to the end of his speech. I hope that he is not, because he has not—it must be an oversight on his part—covered subsection (7) of the new clause. I hoped that he would say a few words about that provision, because it caught my eye. If I read it correctly, it appears to say that an automaticity is built into the provision, whereby it will cease to have an effect after only three months, regardless of the circumstances. That seems to be an unnecessarily harsh restriction, because we do not know the duration of the circumstances that might invoke the use of the provision. I seek clarification from my hon. Friend. Is such automaticity built into the provision? Can he explain his reasoning and reassure me on that point?

Mr. Boswell: I briefly adverted to the fact that the power, being an emergency power, would automatically come to an end. I suspect that the House is familiar with the economic variation of the Gertrude Stein saying—"A trend is a trend is a trend." The question is always whether a trend will end through some unforeseen force. We do not know what might happen in three months, but that is the key to an emergency situation. It would be open to Ministers, in the three-month period, to come to a more acceptable long-term arrangement and, given the circumstances that my hon. Friends have adumbrated, it might be sensible to do so.

Mr. Lansley: In so far as my hon. Friend has followed the construction of the provisions in the Bank of England Bill for similar extreme economic circumstances, is it not logical that if, 28 days before the end of the three-month period, it was clear that the extreme economic circumstances were persisting, it would be open to the Government to bring forward a new order to extend the period of suspension of the national minimum wage? The Government would, of course, need to secure Parliament's agreement that exceptional circumstances applied.

Mr. Boswell: That is a helpful comment, and I shall close on it. It would be possible for the Government to come back to Parliament. The Government should not use a power and then abuse it to pull a fast one on the House. New clause 8 is an emergency provision, but an emergency could extend over longer than merely the three months prescribed, even if parliamentary approval were secured for the initial order. We cannot foresee the future, and we do not know what might go wrong. The Government would be wise to concede that events do not always turn out as they anticipate, and that it would be sensible to have a flexible provision such as new clause 8 to cater for such eventualities.

Mr. Maclean: I wish to comment reasonably briefly on new clause 8.
I cannot remember an occasion during my time in the House on which a Government rejected an order-making power that it would not cause them any grief to accept. I have looked at a few Bills tonight, and, as my hon. Friend the Member for Daventry (Mr. Boswell) pointed out, this Bill is littered with order-making powers. The


Fireworks Bill, a private Member's Bill, has 16 clauses, and all 16 would introduce a regulation-making power so that the relevant Minister could regulate every aspect of fireworks. Other Bills have a similar content.
What do the Government have to lose by including in the Bill an order-making power, the use of which is at the sole discretion of the Government? The Government would determine whether serious economic circumstances prevailed. If they decided that economic circumstances did not satisfy the criteria in new clause 8, they would not have to use the power.

Mr. Forth: May I try to help my right hon. Friend? Is it not possible that the Government fear that, if they accepted the new clause and invoked it in the way described by my hon. Friend the Member for Daventry (Mr. Boswell), and it was seen to be successful in protecting employment, it would demonstrate, as we have argued all along, that the Bill's broader provisions are disadvantageous to employment? Might that not explain their reluctance?

Mr. Maclean: My right hon. Friend is right. If the Government reject the new clause, it will be out of pure political dogma. It is sheer political dogma to reject an order-making power that they do not have to use. They fear that it will be regarded as a tacit admission that they may have difficulties that could necessitate its use. If it was used, and saved a certain employment, region or individual employer from the consequences of the minimum wage, people would point to the general failings of the Bill. For the Government to reject it out of political dogma would show how much faith they have in their legislation.
I hope that my hon. Friend the Member for Daventry (Mr. Boswell) intends to press new clause 8 to a vote. After hearing my hon. Friends and the Minister's reply, I look forward to pushing it to a vote personally. An important principle is at stake, and it reflects ill on a Government who put regulation-making powers into almost every clause of their legislation to reject this one.
The other reason we need new clause 8 is that I think the country is heading into recession. The Chancellor bungled his first Budget, and failed to damp down the level of the pound. We have had five interest rate increases and our manufacturing sector is suffering. Dire economic circumstances could occur much more quickly than the Government or commentators expect.
The first area heading for recession is the countryside and our rural economy. I see the effects of the Government's attack on the countryside in my constituency and in other parts of the country. We have had petrol price increases in the past 10 months, and we shall probably have a vicious increase next Tuesday. Coupled with their other measures on the rural economy, such as abolition of the Rural Development Commission—

Mr. Deputy Speaker (Mr. Michael Lord): Order. The right hon. Gentleman is going rather wide of the mark. Will he return to new clause 8?

Mr. Maclean: Of course, Mr. Deputy Speaker. I was doing that by noting that the abolition of the Rural

Development Commission means that job prospects in rural areas will be diminished. With effects of the minimum wage, we may get a rather rapid recession in the countryside—greater than we have had for 40 or 50 years, greater than between the wars.

Mr. Rowe: Is not my right hon. Friend pointing to the fact that extreme economic circumstances can arise in a sector very swiftly, whether through the influence of something over which Governments have no control, such as BSE, through some temporary cessation of supply, or through a severe frost in the fruit industry? In such circumstances, many people would rather keep their work force together by agreement with them than be forced to lay them off.

Mr. Maclean: My hon. Friend is right. Many of us in rural areas recall the severe frost last May that destroyed a huge part of our plum crop. That damaged that sector of the economy.
When you, Mr. Deputy Speaker, reminded me to stay within the terms of the new clause, I was giving some examples of circumstances which might result in dire economic conditions, and in which it might be appropriate to use the order-making power in new clause 8. I shall return shortly to the subject of how essential that power is in relation to the countryside, but first I shall give another example of exceptional circumstances.
I was a member of the Government when Kuwait was invaded—I think it was 2 August 1992. During the build-up to the Gulf war, there was a severe downturn in the tourist industry, because many people were afraid to use airlines. Our tourist business was severely affected, and I remember statements being made by my colleagues in the Government and by the British Tourist Authority trying to reassure people around the world that it was safe to fly and to come to Britain. There was a huge downturn in the number of American visitors to this country. Thankfully, that effect was short-lived, but it had severe consequences for a rather fragile sector of our economy—the tourist industry.
That is a textbook case in which, for a period—for three months, perhaps extended for a further three months—it would have made sense to use the power in the new clause to lift the consequences of the minimum wage from that sector, where there had been a huge fall in employment. Tourism employs people seasonally or part time. People in that industry would have preferred to hang on to their jobs and take a pay cut while waiting for the war to end and the economy to pick up, rather than be dismissed because companies did not have the business to sustain their employment.

Mr. Bercow: Tourism is an apposite case, because, for much of the past few years, the industry has objected to the very idea of a national minimum wage, fearing that it will produce economic calamities for the industry. The circumstances of a particular downturn that my right hon. Friend describes make the application of a suspension that much more appropriate. Is it not a case of either being able to remain afloat in such circumstances or sinking altogether?

Mr. Maclean: My hon. Friend is absolutely right. Tourism is a textbook case, and it is an entirely apposite example of an industry in which the minimum wage could be suspended because of short-term economic problems.
We might have another oil crisis. I know that we have a convention requirement to stock 79 or 80 days' supply of oil to stave off such a crisis, but who can tell what form the next crisis may take? Events in the middle east or the Balkans may lead to another crisis, whether or not it is genuine. It does not require a genuine crisis to bring about a lack of confidence in the markets and among economic commentators, and, in those circumstances, particular sectors or areas of the country could be severely affected.
The Government would then be in a bit of a panic. They could do all the spin-doctoring they liked, but spin-doctoring would not remove the problem that the national minimum wage might severely affect workers in a specific area or sector. The Government would be powerless to do anything about it. However, if they could use the order-making power contained in new clause 8, they would be able to overcome a short-term crisis.
One of the main points of contention is the economic crisis that will affect rural areas and all types of employment there—not only agricultural workers, who are covered by the Agricultural Wages Board, but all other workers, such as those working in tourism or in agricultural supply. The dire economic circumstances envisaged in the new clause are coming about rather more quickly in rural areas than any of us would like.
The Government might ask what point there would be in suspending the minimum wage for three months, but the power would be extendable. In much the same way as we extend the Prevention of Terrorism Act annually, provision could be built into new clause 8 to allow the Government to extend the three-month period as they saw fit. The new clause would allow the Government to suspend the impact of the minimum wage in objective 5b areas, where people are suffering because of the economic crisis caused by the Government's bungling of policies for the countryside.

Mr. Boswell: My right hon. Friend may remember that I had ministerial responsibility for objective 5b areas, as he had in the early days of the scheme. I confirm that the economies of areas that are likely to benefit from an objective 5b scheme are highly marginal, and would be severely affected by a national minimum wage at anything like the indicated rate.

Mr. Maclean: When we refer to geographical areas, we tend to think of counties or regions, but I am quite clear in my mind that the areas that would benefit most from the power exempting them from the requirements of the minimum wage are those such as objective 5b areas. Large parts of the west country and of the north Pennines will suffer abominably in the next few years, unless the Government take positive action to help them. So far, the Government have shown that they do not understand how rural areas tick.
If we cannot teach the Government how rural areas work, we can at least give them the power to help those areas when they get into severe trouble as a result of more Government bungling, or of a minimum wage set at an inappropriate level. Such a level may work in a booming economy, but it would seriously impinge on rural areas whose economy is suffering.
I urge the Government to accept the new clause. They may not agree with my analysis of the downturn in our economy, or of the severe economic crisis that many rural

areas face, but they must recognise that the new clause gives them a power they can use if they wish: the Opposition parties cannot make it happen; the Low Pay Commission is not in the driving seat, and cannot initiate these powers. The Government would decide whether to use this power. If they reject the new clause, it will be purely out of economic and political dogma, and not because they have great belief in the minimum wage.

Mr. Tim Collins: It is appropriate for us to debate this new clause 10 months into a Labour Government, because it makes provision for economic emergencies, which are synonymous with Labour Governments. Had we had a minimum wage in 1924, new clause 8 would have been needed within 10 months of the first Labour Government taking office, because they had collapsed in the face of rising unemployment. Had we had a minimum wage at the time of the second Labour Government in 1929, new clause 8 would have been needed, because by 1931 we had been forced off the gold standard, which triggered the worst recession this century.
We would have needed new clause 8 had we had a minimum wage at the time of the third Labour Government, from 1945 to 1951, when there were acute shortages and rationing was continuing after the war. We would have needed new clause 8 had we had a minimum wage during the 1964–70 Labour Government, who had persistent balance of payments crises. As my hon. Friend the Member for Daventry (Mr. Boswell) said, had we had a minimum wage, we would undoubtedly have needed new clause 8 at multiple points during the 1974–79 Labour Government, when the International Monetary Fund had to intervene, and we had the winter of discontent.

Mr. Lansley: In the Standing Committee considering the Bank of England Bill, my hon. Friend the Member for Daventry questioned the Economic Secretary to the Treasury on whether this power would have been used in those circumstances. She avoided answering him by saying that the question did not apply, because a different method of managing interest rates is being used: it is now by reference to an inflation target rather than by direct Government control.

Mr. Collins: My hon. Friend makes an excellent point, which enables me to refer to the excellent speech by my right hon. Friend the Member for Penrith and The Border (Mr. Maclean).
In choosing to hand over control of interest rates to the Bank of England, the Government have made more likely the need for new clause 8. There will be substantial economic emergencies because of rapid rises in interest rates and the fact that the Bank of England is not required to pay attention to the wider needs of the economy but simply to aim at an inflation target.
The chances of the new clause needing to be triggered, if it were in the legislation, have increased as a result of some of the Government's decisions in their early months in office. There is clearly a need for such a provision, and the strength of the new clause is that it enables the emergency provision to be triggered in one of several circumstances. We have heard how it could be triggered by difficulties in a specific area. My constituency in Cumbria in the lake district adjoins that of my right hon. Friend the Member for Penrith and The Border. As he and


other hon. Members have said, among the sectors that will be most affected by the minimum wage are tourism and agriculture.
Let us imagine doomsday or worst case scenarios in my part of the world, which depends heavily on tourism. A repetition of the 1986 Chernobyl disaster, which resulted in the dumping over large areas of Cumbria of dangerous radioactive substances could cause severe economic difficulties for agriculture and tourism. Imagine—heaven forfend—what would happen if there were an outbreak of rabies in Cumbria. That would be an immense deterrent to visitors, and would trigger emergency action. New clause 8 would be relevant, because many people in my constituency and elsewhere who were coping with such disasters would much prefer to have, temporarily or on a prolonged basis, a lower-paid job than no job at all.

Mr. Forth: One thing which puzzled me in the early part of the debate, but which will probably emerge as the debate proceeds, is that there has been no mention of the differential impact on small enterprises, and especially those that are labour-intensive. I suspect that such companies predominate in my hon. Friend's constituency and that of my right hon. Friend the Member for Penrith and The Border (Mr. Maclean). Does my hon. Friend agree that one of the main aims of the new clause is to seek to provide easement or protection for such small labour-intensive companies? Does he agree about the significance of that?

Mr. Collins: My right hon. Friend is right, and his intervention is helpful. He mentions exactly the sort of factor that sensible legislation should take into account. The new clause would enable the easement of economic difficulties that could be ridden out by a large multinational. ICI is likely to survive anything. It has survived 70 or 80 years of depressions and recessions, and even successive Labour Governments, which testifies to the longevity of any company.
The small firms that provide only one, two or three jobs are likely to be the engines for future jobs. They are currently being assailed by advertisements to join the Government's new deal to help the young unemployed, and they are the firms most likely to find themselves in the economic firing line. Without the protection of new clause 8, they will not be able to deal with some of the problems that arise.
I think of the difficulties that might prevail in my county of Cumbria if there were an incident at the nuclear installation at Sellafield. That could cause severe economic problems throughout the north-west and north of England. There would undoubtedly be an emergency, and it would be imperative to maintain the economic fabric by keeping some jobs and enterprises going.
Imagine, for example, what might happen in our part of the world if, as my right hon. Friend the Member for Penrith and The Border said, there were a recurrence of the oil crisis. In current circumstances, that is a distinct possibility. It is barely two or three weeks since the House was seriously conducting a debate on the general expectation—I think that it was shared by hon. Members on both sides of the House—that, by the time we reached this point in March, British, American and other forces would be engaged in combat in the middle east and in Iraq.
My right hon. Friend reminded us of the economic consequences of the Gulf war in 1990. We remember the oil crisis in 1973–74 and the immense effect that the sudden, overnight and unexpected acceleration of the oil price had throughout the economy.

Mr. Boswell: I do not know whether my hon. Friend has noticed the answer that I secured to a written question the other day about petroleum stock levels. It showed that they were only two days over the indicated level, which reflects several things, including oil companies' reluctance to continue with heavy inventories. Does he agree that, although it is important not to alarm people unnecessarily, that shows the vulnerability of any modern economy to economic shocks?

Mr. Collins: I agree with my hon. Friend. The other reason that new clause 8 is so important is that it reflects the fact that, since 1974, there has been substantial structural change in the modern industrialised economies. We have moved to what is called the "just in time" philosophy. That means that companies no longer have large stocks of equipment, supplies or other things in their factories. They are used to being able to call instantly on the resources they need, which will include labour resources as well as imported and domestic raw materials.
If an economy is so dependent on transport and on the idea that an order can be placed today and raw materials will be in place tomorrow, and if that network were impeded in any one of the ways we hear about—the impact of the millennium bug when we reach the new millennium, or of a terrorist attack on major installations of power complexes—the consequences could be terrible. 1 have referred my hon. Friends to a report earlier this evening on "Channel 4 News", which showed the desperate circumstances of businesses in Auckland, New Zealand, which face the prospect of months of power cuts.
By any definition, those are economic crises that would make it next to impossible for some businesses to stay viable and to pay a national statutory minimum wage, which might have been determined in circumstances where any of those things seemed completely remote: power cuts, computers failing, a massive oil crisis or international developments leading to war. All those might not have been taken into account by the Low Pay Commission in setting the national statutory minimum wage level, but all would amount to a clear and present economic emergency for many businesses in a geographical area, business sector or particular part of the country. In those circumstances, new clause 8 would afford them valuable and absolutely vital protection.
New clause 8 has several other merits. It allows for the Low Pay Commission to be consulted, if it is reasonably practicable. There is no question of it being sidelined by the new clause. However, it is intended to be triggered in circumstances of emergency, where there is likely to be urgency, so the Secretary of State is given flexibility. If the Secretary of State is confident that he or she has the power and time to consult the commission, they may do so. If not, that does not prevent them from acting.

Mr. Boswell: Does my hon. Friend agree that, if push came to shove, a telephone call to the Low Pay Commission chairman would be better than nothing?

Mr. Collins: I entirely agree with my hon. Friend, who again demonstrates the essential reasonableness,


rationality and moderation of new clause 8, which is, sadly, a little lost on the Government Front-Bench team. It may deeply regret not having accepted the new clause.

Mr. Syms: Will my hon. Friend consider this aspect? Would not consulting the Low Pay Commission be vital to politicians, who, faced with a crisis, could lean on a commission of experts to give advice on the matter, rather than take arbitrary political decisions?

Mr. Collins: I agree with my hon. Friend, who once again points to one of the great strengths of new clause 8. It would write into the Bill something that would be welcome in any legislation introduced since 1 May 1997—Wa requirement that Parliament be consulted and that the House takes the final decision on the fate of any orders brought in under new clause 8. Throughout the Bill, order-making powers are given to the Secretary of State, in very general terms, without any reference to this House.
A common pattern across the Government's legislation is the giving of immense discretion to Secretaries of State, other Ministers, new assemblies or parliaments or other quangos that the Government are creating or amending. New clause 8 would directly give Parliament the power to approve or disapprove an order. Of course the Secretary of State could act with immediacy and urgency in a pressing economic crisis, but equally it would be for Parliament to take a view on whether the Secretary of State had acted properly and whether he should continue with any action he had taken.

Mr. Bercow: In view of the evident reasonableness of new clause 8, does my hon. Friend agree that the only possible explanation for the Government's refusal to contemplate accepting it is that they have so often gone on the record insisting that a national minimum wage could not contribute to an economic downturn, and that they now feel unable to do an about-turn and admit that they might have been wrong? Is it not an example of what the late and distinguished economist and political philosopher Friedrich von Hayek described as the "fatal conceit"?

Mr. Collins: I agree with my hon. Friend, as I am sure he would agree with me that the Government are guilty of any number of fatal conceits, which will no doubt lead to their imminent demise.
I disagree with one small part of what my hon. Friend said, in that he advanced only one possible theory for the Government opposing new clause 8. There is another theory, which is that they are already beginning to hear the flapping wings of the chickens presently stacked over Heathrow but ready to come down to roost over Downing street. They fear that the powers given in new clause 8 to a Secretary of State would soon be powers exercised not by a Labour Secretary of State but by a Conservative Secretary of State. That is part of the reason why they are not sympathetic to new clause 8.
My hon. Friend the Member for Buckingham rightly points me in a new direction, which is the Government's stance on this matter. Is it their contention—which would be the logical consequence of them opposing such a reasonable, modest and mild provision—that there are no circumstances whatsoever in which a minimum wage

could deter employment, impede enterprise or restrict the ability of those who are working for another group of people to do so effectively and efficiently? If that is the case, we can only wonder why they propose to exempt the self-employed, the armed forces and those under the age of 26.
Why did the Deputy Prime Minister, in a famous Sunday television interview, observe, "Of course the minimum wage will cost jobs; any silly fool knows that"? That was a rather welcome outburst of candour from the Government, yet their attitude to new clause 8 is inconsistent with that.
If the Government believe that, even in normal economic circumstances, members of the armed forces should not be subject to the Bill's provisions; if they believe that, even in normal economic circumstances, people under the age of 26 would be difficult to employ if they were subject to a normal statutory national minimum wage; if they believe that, even in normal economic circumstances, self-employed people would find it excessively onerous, bureaucratic and a deterrent to their ability to create wealth and jobs to fulfil their commitments under a statutory national minimum wage, surely they recognise the powerful argument of my hon. Friend the Member for Daventry, that, in circumstances of acute economic crisis and distress of the sort that we have discussed this evening, the whole economy or, alternatively, some parts of it, either geographical or according to particular businesses, might require some assistance.
New clause 8 is something of a test for the Government—a test of logic. The logic of Ministers' position on a series of other issues is that they should accept new clause 8. The new clause is a test also of their commitment to democracy, as it would include in the Bill new powers that would be clearly constrained by requiring reference back to the House. It is a test of their commitment to recognising potentially serious economic circumstances. It is a test also of their flexibility.
Earlier in the debate, we heard the Minister say, in a most extraordinary remark on a different clause, that an amendment was excessively prescriptive. If ever a Bill was prescriptive, it is this one: it gives the Secretary of State power to dictate by order the amount that people may be paid for performing jobs. New clause 8 is anything but prescriptive. It would give the Secretary of State power to intervene to suspend the Act; it does not require intervention. It does not say that, in certain circumstances, a Secretary of State might find himself or herself hauled up before a court or other body for not invoking it. Discretion is left to the Secretary of State.
Time after time, we have seen in the history of Labour Governments how often it has been necessary for provisions to be in place enabling emergency measures to be taken. How many previous Labour Chancellors of the Exchequer or Prime Ministers would have liked to have some means of getting themselves out of the holes into which they had dug themselves?
In passing new clause 8, the Government would get something for nothing—an additional discretionary power—which they should not fear. The new clause's provisions are consistent with what Ministers have said before. They can oppose it only if they are out of kilter with their previous statements and not as confident as they pretend to be of being in office for perpetuity.

Mr. Ian McCartney: For almost an hour and a half, we have been treated to one of the most extraordinary debates so far on the minimum wage legislation. Conservative Members have repeatedly attempted, both in Committee and outside the House, not only to construct the most bizarre reasons why we should not establish a minimum wage but to justify their role as apologists for low pay. However, tonight's debate has surpassed all the previous debates and statements, setting an absolute record of contempt and showing an absolute lack of concern for poverty in rural areas and poverty in general. We have seen in this debate Conservative Members' apparent denial of the reasons why they lost the general election—leaving the Government with a massive inheritance to clear up.
Conservative Members who have spoken in this debate have been no more than a smokescreen for a dubious campaign to prove how well the previous Government represented rural areas. Let us consider their record. The previous Government's bus deregulation destroyed almost every public transport system in the countryside—but not a single Conservative Member uttered a single word of opposition to the closure of rural transport links. The previous Government—not once, not twice, but three times—tried to destroy the rural post office network by privatising it.
What of the closure of rural railways? The hon. Member for Daventry (Mr. Boswell) was a member of a Government who destroyed rural railways—against which destruction not a single word was uttered by Conservative Members. Conservative Members campaigned to abandon the Agricultural Wages Board, although thousands of constituents of at least two hon. Members who have spoken in this debate are covered by the Agricultural Wages Board and by minimum wages. Those poor rural farm workers are still covered by minimum wages because farmers and farm workers joined together and revolted against the previous Government's attempts to abolish minimum wages in rural areas. What about the sale of housing association homes in small villages, which has led to a collapse in the supply of affordable homes in rural communities?
What about the BSE crisis? The right hon. Member for Penrith and The Border (Mr. Maclean) spoke so piously, but he was a Minister in a Department that denied—not for months, but for years—that BSE caused damage, posed dangers or formed a link in the food chain. He bears heavy responsibility—by his inactivity, because he could have done something about it—for what has happened to United Kingdom agricultural interests. His abysmal failure—both personally and collectively—to do so something about it has left us with a legacy of job losses, of billions of pounds of losses to the British economy and of damage overseas to our industry. He stood at this very Dispatch Box and denied that a problem even existed. He had better not give Labour Members any lessons, or lectures, about the rural economy and the effects of Government policies on rural areas.

Mr. Maclean: Will the hon. Gentleman give way?

Mr. McCartney: In a moment.
I have never thought of the hon. Member for Daventry as subversive, in any circumstances. I think I told him in Committee that I thought of him more as a Captain

Mainwaring—the leader of a Dad's Army. Certainly, he has come into battle tonight with something of a battered shield in trying to stop the onward march of the national minimum wage.
The hon. Gentleman normally puts up a substantial argument in Committee, intellectually. My hon. Friends and I have to think carefully about most of the points that he makes, and on occasion he has made points that I have been prepared to concede, both because of the rightness of what he has said and because of the way in which he has said it. The new clause, however, is no more and no less than an opportunity for Conservative Members, in a completely undisguised way, to attack the whole concept and principle of the minimum wage.
11.30 pm
Let us consider some of the arguments that we have heard. We have heard arguments about the single currency. Can the hon. Gentleman name any country in Europe which has signed up to the first wave that has decided to suspend the national minimum wage legislation, or has given any reason to do so? Then there is the argument about BSE. Interestingly, the new clause does not refer to the Agricultural Wages Board or to the suspension of agricultural wages legislation. It is possible that, if workers in rural areas were covered by the board, there would be no suspension, despite what has been said by the right hon. Member for Penrith and The Border (Mr. Maclean) about the crisis caused by BSE. Rural workers who have no interest in agricultural activities will have their wages arbitrarily cut, while agricultural workers involved with BSE will not be covered by the new clause.
The whole thing is a shambles, for one simple reason. There has been no intention of thinking this through; it was just another hook on which to hang the prejudices on which opposition to the minimum wage is based.

Mr. Maclean: Will the hon. Gentleman give way?

Mr. McCartney: The right hon. Gentleman need not worry. Before the end of the day I will give way.
The issue of rabies was raised. Here is a sound reason why the poorest people in Britain should not have a minimum wage: someone might be rabid. The only people I know of so far who may be rabid are Conservative Members: they become rabid as soon as we mention the minimum wage. The same is true of the issue of Chernobyl or Sellafield. There is a possibility that at least a million people in Britain earning under £2.50 will immediately have their wages cut on the grounds of a crisis in Sellafield.

Mr. Maclean: The hon. Gentleman made a strong attack on my handling of the BSE crisis when I was a Minister. Can he give a single example of any official advice that I ignored, or did not put into effect? Has he brought any of his allegations to the attention of Lord Justice Phillips?

Mr. Deputy Speaker: Order. If the Minister replied, he would stray rather far from the terms of the new clause.

Mr. McCartney: I accept that, Mr. Deputy Speaker, but you obviously decided that it was in order for the right


hon. Gentleman to raise the issue of BSE as a reason for cutting low-paid workers' wages. My point was that the BSE debacle happened because the right hon. Gentleman, as a Minister in the last Government, allowed the situation to develop as it did. I withdraw nothing that I said about that.
The next item on the agenda is the possibility of suspending the minimum wage—in fact, cutting wages—for workers on the basis of the millennium bug. Were Opposition Members suggesting that if people were paid a minimum wage there might be power cuts and a further oil crisis? Quite frankly, it beggars belief that they ask us to take the new clause seriously as a genuine attempt to improve the Bill.

Mr. Lansley: It appears that the Minister cannot accept that it would be right to suspend the national minimum wage in any of the circumstances that have been described. Does he believe that, because he cannot envisage any circumstances in which it should be used, such a power should not be included in the Bill?

Mr. McCartney: I shall come to what powers should be on the face of the Bill in a moment, but may I ask Opposition Members one question that they have never answered? In envisaging a crisis that was so real and of such consequence that it was necessary to cut the minimum wage, why have they remained silent about everyone who is paid more than the minimum wage? If, in the event of a national crisis, the very poorest—because no one will be paid less than the minimum wage—are to bear the entire brunt of that crisis, which is surely the intellectual argument that Opposition Members are making, what will happen to those who are better off or well off? Are people with huge resources to be excluded from the consequences of any financial or economic crisis that may arise while the lowest-paid workers in Britain bear the full weight of that crisis? It is economic illiteracy.
The Opposition are using the new clause for one simple purpose: to make a further attack on the principle and concept of establishing a national minimum wage and dealing with the inheritance that they left the United Kingdom. There are large areas of low pay in Cumbria, Scotland, Northern Ireland, Wales—in the north, south, east and west. Huge numbers of families who work full time are paid so little at the end of the week that they have to rely on state benefits. That is the legacy of the Conservative Government. We are addressing the real national emergency—their legacy of poverty pay, not their spurious arguments that we have heard so far in support of the new clause.

Mr. Maclean: To return to the subject of economic illiteracy, does the Minister not understand that it is not necessary to have such an order-making power in respect of those who are paid more than the minimum wage because there will be no statutory bar to their accepting lower wages? Those who are covered by a minimum wage provision, however, would require such an order-making power to take them outside the statutory provisions in an emergency. The new clause is not putting the burden purely on the poor; people who are paid more can have their wages reduced more easily.

Mr. McCartney: That is more absolute nonsense. Under the new clause, the low-paid can have their wages

cut, but the better-off and the very wealthy can think about it. They will think about it for exactly one second and get on with the rest of their lives.

Mr. Ian Bruce: On a point of order, Mr. Deputy Speaker. I wonder whether the House authorities can check whether the speakers are working on the other side of the Chamber? The Minister is obviously not listening to what is being said or not hearing it.

Mr. Deputy Speaker: That is not a sensible point of order.

Mr. McCartney: Your comment about the hon. Gentleman not making sensible remarks is probably the most sensible observation that I have heard in 11 years in the House, Mr. Deputy Speaker.
The hon. Member for Daventry mentioned the Bank of England Bill which deals with the macro-economy and allows the economic levers controlled by the Bank of England to return to the Treasury under certain circumstances. The National Minimum Wage Bill is about individual rights and covers a relatively small part of the economy. It is a matter of proportion. Even the Tory Government did not provide a mechanism for removing unfair dismissal rights in a national economic emergency.
Suppose that I had taken as genuine what the hon. Member for Daventry said—that the new clause sought to assist. It would quickly have become quite clear from Back Benchers' speeches that their arguments had nothing to do with assisting the Bill and everything to do with the continuation of low pay among large sectors of British society and with protecting employers who are quite prepared to continue paying £1.20, £1.30, £1.50 or £1.60 per hour. Perhaps Conservative Members will answer a question that they have never answered: do they intend to fight the next general election on a promise to scrap the national minimum wage? If the Conservatives press the new clause, I ask my hon. Friends to vote against it.

Mrs. Theresa May: I shall speak only briefly on the new clause. I do not intend to go into the various extreme economic circumstances that might lead to the necessity of operating the provisions of the new clause.
I was astounded by the Minister's reaction to our sensible proposal. I admit that I was not on the Standing Committee that debated the detail of the Bill, so I had not hitherto had an opportunity to see the Minister in full flight on the Bill. Having heard several of his responses so far, I am disappointed that he is not able or willing to address the issues that are raised. He merely talks about the dogma of whether there should be a national minimum wage. The Bill is about a national minimum wage. Our new clauses are about the practicalities of the operation of the Bill.

Mr. Ian McCartney: The hon. Lady is right—she was not in Committee. She obviously did not listen to the hon. Member for Daventry when he moved the new clause. The new clause would not provide for a national minimum wage; it would get rid of it. The purpose of the new clause is to suspend it or cut it.

Mrs. May: The Minister obviously was not listening to what I just said. I listened to my hon. Friend the


Member for Daventry (Mr. Boswell). The Minister's responses are all about whether there should be a national minimum wage. He has not addressed the practicalities of how it should be operated. The new clauses that the Conservatives have proposed have all addressed practical issues about the operation of the national minimum wage in certain circumstances. New clause 8 is a good example of that.

Mr. Desmond Swayne: Can my hon. Friend somehow get it through to the Minister that the purpose of the new clause is to allow those who would otherwise lose their job in extreme circumstances to hold on to it and have a wage at all?

Mrs. May: I am grateful to my hon. Friend for that very valid point. He makes it with rather more force than I could. In extreme economic circumstances, when the choice is between people losing their job or keeping it at a lower wage, the Minister is saying that people should lose it and have no wage. He does not want the flexibility of allowing employers to step aside from the provisions of the national minimum wage for a limited period in extreme economic circumstances.
We are extending a generous helping hand to the Government. We are giving them the means of saving them from themselves. [Laughter.]

Mr. Ian Bruce: My hon. Friend is getting guffaws from Labour Members. They seem not to appreciate that, despite the many hours that the Bill spent in Standing Committee, seven of the groups of amendments are Government amendments because they did not get it right before. Madam Speaker is keen to ensure that amendments that have already been well debated are not selected, yet there are 16 groups on the selection list. That shows what a mess the Bill is in. Labour Members should listen to my hon. Friend rather than laughing at what she is saying.

Mrs. May: My hon. Friend is absolutely right. It is extremely disappointing that, despite the fact that the Government have had to table a whole series of amendments because they failed to get the Bill right first time round, they will not spend time listening to the practical points that we are raising in a spirit of generosity. We are trying to help the Government out of the problems that they are causing.
There are two types of circumstances in which it could be necessary for the new clause to operate. The first is where extreme economic circumstances have been caused by some external shock to the system. A variety of such examples have been given by my right hon. and hon. Friends. I seem to recall that, in moving the new clause, my hon. Friend the Member for Daventry referred to a circumstance in the 1970s, when the then Chancellor of the Exchequer, now Lord Healey, had to be turned back at the airport. I recall that, at the time, Lord Healey made the famous remark, "Crisis? What crisis?" It is therefore not surprising that the Government are not taking any notice of the issue. It is obvious that the Labour Government would not see an extreme economic circumstance if it came up and hit them.

Mr. Boswell: My hon. Friend is making an interesting argument. Does she agree that, although the Labour Government could not recognise an economic crisis, and would be powerless, unable or unwilling to do anything about one, we would suffer?

Mrs. May: My hon. Friend is exactly right. The people who would suffer particularly are those who lost their jobs because the Government had not taken unto themselves the power to set aside the national minimum wage provisions for a limited period.
The Government are creating the other set of extreme circumstances themselves. That is precisely why I say that we would be saving them from themselves in pressing the new clause. My right hon. and hon. Friends have referred to circumstances that are being created at the moment. Given the strength of the pound, the five interest rate rises and the impact of the Chancellor's first Budget, many firms are in extreme difficulty.

Mr. Syms: Does my hon. Friend agree that it is not just a question of suspending the national minimum wage to help companies? A company that stays in business is one that can pay its debts to other companies. In a crisis, a number of companies may go out of business. The temporary provisions could well provide a structure that would enable many businesses to remain in the industry.

Mrs. May: My hon. Friend's point is extremely well made. Given the Minister's interest in payment of debt, I trust that the Government have listened to that point and will take it on board.
It is absolutely clear from the Minister's response that he simply does not understand the impact of his own legislation. I repeat—it bears repeating, because I fear that the Minister has not understood the point—that, in extreme economic circumstances, where it is necessary to relieve pressure placed on firms as a result of the national minimum wage, the choice will be between unemployment and employment at a reduced wage. If there has been economic illiteracy in the debate, it has been the Minister's response, "Oh, well: only the poor will have their wages reduced".
As my right hon. Friend the Member for Penrith and The Border (Mr. Maclean) said, the wages of people not on the national minimum wage could be cut easily because there is no statutory backing for the level of their wage. If circumstances made it necessary to cut the wages of those on a national minimum wage, but it could not be done because of statutory provisions, those people would lose their jobs.

Mr. Bercow: I am following the logic of hon. Friend's argument closely. Does she agree that the Government's rejection of new clause 8 is not only wrong but illogical? It is illogical for Ministers to argue that, in economic good times, it is prudent to raise the level of the national


minimum wage, but to reject the notion that, in economic bad times, it is somehow not prudent to suspend, disapply or lower the national minimum wage.

Mrs. May: My hon. Friend is entirely right. The illogicality is more evidence of the fact that, although the Government consistently talk these days about flexibility of labour markets, they do not understand what that means.

Mr. McCartney: The hon. Lady has almost made my point for me, so perhaps she will confirm it. Does the Conservative party advocate general wage cuts in all economic circumstances? Is that what the hon. Lady is advocating? Is it true that the Conservative party stands for general wage cuts throughout the economy?

Mrs. May: No, that is not what I am advocating, and that was not what I said. Perhaps the Minister would care to listen more carefully to what I say in future.
I said that I would speak briefly on this matter, but the Minister has proved, by his response and his continual interventions, that he has completely failed to understand the impact of the Bill or the necessity for the provisions in new clause 8.
The Government fail to take on board the reserve power that is proposed in new clause 8. I find that illogical in another sense. I sat through the Committee that considered the School Standards and Framework Bill, in which the Government were constantly incorporating provisions for reserve powers, saying, "Trust us; don't worry; they are there in case of emergency circumstances." Yet now, suddenly, the Government are completely unwilling to incorporate in this Bill powers that would enable them to cope with emergencies.
We are not suggesting that new clause 8 is about a general wage cut. We are saying that, in certain economic circumstances, in certain areas, if people are to keep their jobs, the national minimum wage provisions must be set aside. As my right hon. Friend the Member for Penrith and The Border said in his excellent contribution, one can only assume that the Government are driven purely by dogma rather than by concern for the low-paid or for those on low pay scales whose jobs may be affected in difficult economic circumstances. The Government are only interested in their own dogma.

Mr. Oliver Letwin: I have listened with great interest to the illuminating contributions of my right hon. and hon. Friends and the Minister. I believe that my hon. Friend the Member for Daventry (Mr. Boswell) and my right hon. and hon. Friends who spoke subsequently have significantly undersold the merits of new clause 8, for two reasons in particular. I hope that the Minister finds my argument sympathetic; I believe that it accords with the logic of the Bill.
First, I believe that, in Opposition contributions to the debate, a somewhat loose use has been made of the very precise wording of new clause 8, which refers not to economic crisis—which might be regarded as unlikely to occur frequently—but to "extreme economic circumstances". This takes us to the heart of the issue of the minimum wage and its effects on employment.
As the Minister will no doubt agree, the principal feature of the minimum wage is that it works if it is set at a level where the marginal utility of labour exceeds the

minimum wage—where the employer finds that an extra employee earns more for the firm than the minimum wage that must be paid, taking account of the social costs of labour, national insurance contributions and so on. Therefore, the phrase "extreme economic circumstances" has a specific meaning in the context of the Bill, because it does not necessarily refer to a generalised catastrophe in the economy. It could also refer to any set of circumstances that alters the marginal utility of labour.
In some circumstances, companies could survive quite nicely using capital assets, perhaps making large profits, but those same circumstances might mean that the additional employee, who was well able to find a job a little earlier in the economic cycle because he was able to earn for his employer, as an extra employee, slightly more than the minimum wage, finds, later in the cycle, that, governed by the same minimum wage, set, perfectly reasonably, by the Low Pay Commission or the Minister on its advice, he can no longer earn enough for the firm to justify that minimum wage.
Currently, such extreme economic circumstances are easy to imagine. My right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) mentioned economic and monetary union. In all probability, the Minister and the Labour party are determined to take this country into that mechanism at a certain point. In those circumstances, it is easy to imagine a concatenation of interest rates and fiscal policies which for this element of the European Union would result in a significant adjustment of the marginal utility of labour.
The policies may provide for perfectly reasonable distribution of labour costs and profits around the continent as a whole, but leave us and perhaps one or two other countries in a position where the additional employee no longer earns as much for the firm as the minimum wage would force the employer to pay. Under those circumstances, only powers of the sort that new clause 8 provides could allow a Government to adjust without disrupting the entirety of the minimum wage legislation.
My hon. Friend the Member for Maidenhead (Mrs. May) clearly spoke the truth, which is that new clause 8 would help the Government to save themselves from themselves; or, to put it more generously, it would assist the Government to make the Bill workable.
A second reason for the Government to accept new clause 8, which is even more important to the Government's case and their logic, springs from the first reason. Hon. Members on both sides of the House will agree that circumstances may arise in which the minimum wage is set at a level in a given year or set of years that is in practice acceptable to employers in the sense that they would want to employ additional labourers. However, they may fear that there might come a time thereafter when those circumstances will no longer obtain and so, in advance of extreme economic circumstances, they might be unwilling to take on additional labour simply because of the fear of the inflexibility of the legislation that would obtain in the absence of new clause 8. The presence of the new clause would act as a signal to those employers that under such circumstances the Government could alleviate the situation by using the reserve powers.

Mr. Ian Bruce: Has my hon. Friend read into the clause the intention that I would attribute to my hon.


Friend the Member for Daventry (Mr. Boswell)? For instance, if there were a natural disaster, local low-paid workers might volunteer to do additional work—they are usually the first to do so—for their employers, for the public good or whatever. The employer might suddenly say, "Hang on. I can't pay you." The worker might say, "It's all right." However, the employer would answer, "No, I'll get prosecuted under the minimum wage legislation." Surely then the Government could say that, given the snow or the floods—whatever the catastrophe—they would temporarily suspend the minimum wage order.

Mr. Letwin: Such circumstances are a possibility, but I was trying to point out that the new clause would rescue the Government and the Bill from a wider danger—the danger that, across the economy as a whole, employers would be reluctant to take on additional labour that might be justified even with the minimum wage set at whatever level it had been set at simply because they feared that at some later stage in the economic cycle some relatively unforeseen and extreme economic circumstance—extreme only in the sense of adjusting the marginal utility of labour—might make that the wrong decision.
I am not speculating—that has happened. Under previous Administrations, before certain reforms of the labour market and of employment law, employers were more willing to take on additional labour. There was a time when employment protection—the legislation was well intentioned—was so restrictive and made dismissing an employee so costly that employers were unwilling to take on people. The loosening of those employment laws was heavily responsible for the change in our labour market and the difference between unemployment in this country and in our European counterparts at every stage of the economic cycle.
The same structure of argument applies to the new clause. [Interruption.] If the Minister wants to intervene, I am more than willing to give way. The new clause would permit the Government to make an exception and therefore would enable employers to employ people without worrying that they would later face the twin constraints of a decrease in the marginal utility of labour and the minimum wage.

12 midnight

Mr. Swayne: Will my hon. Friend answer two questions? First, to what extent would such a power have to be used to create the environment of reassurance that employers would require to continue to take on employees rather than to replace them with capital? Secondly, in what ways does he envisage the power in new clause 8 being used? As I understood his remarks, it is likely that the power would regularly be appropriate during a particular phase of the economic cycle and that it would not be a severe shock.

Mr. Letwin: My hon. Friend asks characteristically acute questions. I do not envisage—this is made clear in the new clause—that the power would be invoked regularly at a particular point in the economic cycle. My argument is that the fact that it could be invoked at a given point in the cycle would have an effect—I think that this is undeniable—on the behaviour of employers before that point. There is an asymmetry between likely

reality and fear, which the Government ignore at their peril and, more important, at the peril of those who are employed or would like to be employed.
On my hon. Friend's other point, the powers in the new clause would typically be used only in "extreme economic circumstances". The definition of extremity relates to the marginal utility of labour. If the Government took that argument seriously—manifestly, from the Minister's guffaws and amused expression, that is far from likely—it would be to the benefit of the Bill.
I offer a mild prophecy: a year or two from now, the Government will return to the House seeking precisely such an order-making power because some minute and unforeseen circumstance will have arisen in which such a power is required to prevent what would be, from the Government's point of view, although not from that of Conservative Members, a much greater calamity—the need substantially to revise the whole Bill in order simply to avoid a particular, local problem.

Mr. Boswell: This has been an interesting, lively and well-attended debate. I do not intend to speak at length. It is good to see at this late—or early—hour the attendance of so many hon. Members, although there has been a deficiency, now modestly repaired, on the Liberal Democrat Benches.
I shall respond first to the remarks of the Minister, whose metier may lie outside the House as a fairground barker or something similar. He made some unwarranted comments about my right hon. Friend the Member for Penrith and The Border (Mr. Maclean) in respect of BSE. It is rather silly and injudicious to set up an inquiry under Lord Justice Phillips and not to wait for its conclusions, which will be of more interest than the Minister's remarks tonight.
The Minister asked why no other European country among the 11 who are likely to join the first stage of economic and monetary union had a suspensory power. First, those countries are unwise not to have such a power. Secondly, I think that their unemployment record would suggest that, in general, their labour market policies are not of the wisest.
The Minister asked why I had not tabled any amendments concerning the Agricultural Wages Board. That is not the subject of the Bill, and Ministers have been, at pains to say that any changes that they are proposing to the operation of agricultural wages legislation are confined solely to matters relating to the implementation of the national minimum wage. Had I tabled any such amendments, they would have gone wider and would probably have been outside the long title of the Bill.
If the Government were to accept the new clause, which is modest and well intentioned, they would effectively be letting their cat out of the bag, because they would be giving themselves powers to do something about the consequences that will inevitably follow from their decision to implement the minimum wage broadly universally and at a single rate. There will be industrial consequences, and the economy may not be able to respond competitively to international shocks.
There is an essential ambiguity in the Government's attitude. The Bank of England Bill implements one of their treasured policies, about which I have grave reservations: to introduce a Monetary Policy Committee,


independent of the Chancellor, to run our monetary policy. In that Bill, they provided for a way out in cases of external economic shocks.
We have copied that provision into our new clause, but because of their political commitment, given regardless of the economic consequences, the Government are not prepared to provide for themselves the powers to take action to meet any such shocks. What is sauce for the goose should be sauce for the gander. A clause in one Government Bill should be a new clause added to this Bill.

Question put and negatived.

New clause 12

OPERATION OF AGRICULTURAL WAGES ORDERS

'. Within twelve months of the laying of the first regulations under section 1 or 2 of this Act, the Low Pay Commission and the Agricultural Wages Boards acting jointly shall make a report to the Secretary of State and to the Minister for Agriculture, Fisheries and Food on the operation of section 44 of this Act and the enactments mentioned in section 45(1) and (2) of this Act, and may make recommendations for such amendment of that section and those enactments as, in the opinion of the Commission, may ensure the more effective application of this Act to agricultural workers.'.—[Mr. Boswell.]

Brought up, and read the First time.

Mr. Boswell: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this, it will be convenient to discuss Government amendments Nos. 29, 31, 36, 37, 30, 32 and 38.

Mr. Boswell: The strongest single case for the new clause is the list that you, Mr. Deputy Speaker, read out of no fewer than seven Government amendments that have attached themselves to the new clause. They form part of no fewer than 11 Government amendments to schedule 2, the agricultural wages schedule, not to mention the many Government amendments that were tabled in Committee. If those provisions are meant to achieve a blending of the conceptual streams of the National Minimum Wage Bill and the agricultural wages legislation, it is an untidy blending indeed.
When I was in Germany in the autumn, I visited Koblenz—the name stems from the Latin word confluencia—where the Rhine and the Moselle join. There is a visible difference in the colour of the water, one being greener and the other blacker. Despite the Government's best efforts, they have not achieved an imperceptible blending of the agricultural wages legislation and the Bill. That is not surprising; they are different concepts and they were written in different generations.
I was the tender age of five and a half, and just about to start primary school, when the Agricultural Wages Act 1948 was introduced. Some 50 years later, we are introducing national minimum wage legislation. I do not scoff at the Government for doing so, because it is a difficult task. They have decided to have a national minimum wage, and they want it to fit with the agricultural wages legislation.
As Ministers will know, we have already had a debate about the permit system under the agricultural wages legislation. I regret its passing—at least up to the level of

the national minimum wage—and wish that it could have been extended to make wider provision for those who are so disabled as to be unable to earn the national minimum wage. The Government will come to regret that that has not been done. More immediately, the 102 persons who currently avail themselves of a permit under the Agricultural Wages Act 1948—which I remind the House was introduced by a Labour Government—will regret the consequences of the imposition of the national minimum wage.
The need for harmonisation—the Bill provides powers to make further changes to the agricultural wages legislation so that it fits better with the national minimum wage—argues strongly for a joint approach by the Low Pay Commission and the Agricultural Wages Board to report to Ministers before any changes are made. The Minister will recall that, when we discussed the issue in Committee, she explained that this year's review by the Agricultural Wages Board would be deferred for some 12 months so that those involved could see how the legislation fitted together. New clause 12 is a logical extension of the Minister's proposals.
The raft of Government amendments that have been tagged on to new clause 12 need a more precise explanation from the Minister than we have had so far. We need to see the colour of her money. The concepts in the Government amendments do not leap easily off the page, the hour is already late and I find it difficult to disentangle what is going on. The broad concepts behind the amendments are intelligible. Government amendments Nos. 31 and 37 are intended to prevent overlapping powers, or double jeopardy. That may be sensible.
Government amendments Nos. 36 and 30 deal with the dog rate. The Minister may remember that, in Committee, I referred to the intriguing concept of the dogs' national minimum wage. Under the agricultural wages legislation, agricultural workers may obtain an allowance for keeping a dog. For example, a shepherd might be required to keep a dog by his employer. Such arrangements are set out in the legislation, although I suspect that not many people make use of it. It is an interesting relic that some people may still find useful. I understand why that should be excluded from the national minimum wage because we are not extending the payment to dogs, even if we like dogs as a class of animal.
I am more concerned about Government amendment No. 29 and, in particular, about the component rate. It seems that the Government are playing both ends against the middle because they seek to exclude the top component, the night work rate. As it is now 12.14 am, it is appropriate to discuss night work rates because they apply at night after the first two hours and are a modest but appreciated supplement to the agricultural wages basic rate. If that is the normal pattern in which someone works, it is not self-evident a priori why they should be excluded, certainly not without a recommendation from the Low Pay Commission to explain it. After all, such rates are paid by employers and may reflect a regular pattern of payment. It is for the Minister to make her case on that.
12.15 am
I am conscious of the time, but I want to say a word or two about the overall implications of the agricultural wages orders, which I should have thought a joint study


by the Low Pay Commission and the wages boards should cover, as proposed by new clause 12. Agriculture is an interesting industry.

Mr. John Home Robertson: Hear, hear.

Mr. Boswell: It is nice to have the support of the hon. Member for East Lothian (Mr. Home Robertson), who has a considerable knowledge of the industry and is influential in high places. As a bigger, and perhaps even better, farmer than me he knows that the industry is not doing too well. There was a decline in farm incomes of 45 per cent. last year. No commodity or group of commodities is flourishing. That is putting severe pressure, both economic and psychological, on farmers and their employees. The number of employees has been diminishing for years. Only about 170,000 farm workers are now covered by the agricultural wages orders, but within that are several interesting and different cases.
I said in Committee, so I shall not dilate on it tonight, that in the arable sector and stock keeping there is a significant number of highly skilled craftspeople who are paid substantial rates. The Agricultural Wages Board by no means any longer, whatever it may have done initially in 1948, prescribes only for those at the bottom of the pile. It provides a ladder related to craft, permanence of employment and the attaining of certain responsibilities and qualifications. It is possible to find from that an average or standard rate, as it were, of about £4.17, which is substantially above what we now hear from the Government about the likely rate of the national minimum wage. The figure goes up to about £8 an hour for some of the appointment grades. Those people are in no sense unskilled or particularly underpaid. Some have salary arrangements, and are valued employees.
That part of the agricultural economy exists alongside other people, often in casual employments, who are paid at lower rates, which can drop as low as £3.06 an hour but still comply with the order. That is particularly true of horticulture, which employs a significant proportion of the total labour force—some 50,000 out of the 170,000. Not all those people are paid for; some are partners in the business. Horticulture is a significant component.
Then there is seasonal work; for example, fruit picking or planting, which are jobs that do not necessarily involve a high level of skill, although they may involve an increasing level of skill—I hope they do. Some such workers will be paid at a relatively low rate, but if labour is not supplied at that rate, or if the rate rises, it is uneconomic to pick. I find that rather sad, because it could lead to the demise of the British apple. If my hon. Friend the Member for Faversham and Mid-Kent (Mr. Rowe) were still here, I am sure that he would talk on that subject. In the evidence of the National Farmers Union, horticulture is singled out as an area of particular stress.
We do not know what will happen in the next 12 months. We know now that agriculture across the piece—from arable farming, which is often highly capitalised, through livestock farming, which is organised extensively throughout the United Kingdom, to horticulture, some of which is intensive and highly capitalised and some of which is reliant on seasonal or casual labour—currently faces difficulties.
It would be sensible to look at the technical aspects of agriculture and its interaction with the national minimum wage in, say, 12 months' time and to consider some of the wider economic implications, because no one can look at the industry at the moment and feel happy with how things stand. Nor can anyone regard with complete confidence the introduction to the industry of a national minimum wage—albeit not all workers in the industry will be affected because the statutory rates may exceed the minimum wage rate.

Mr. Ian Bruce: I wonder, because I did not serve on the Standing Committee, whether the Government gave any indication that they were considering extending wages boards back into other industries once they got the minimum wage set. They have been keen on wages councils and boards in the past, but have they given any indication of their plans for the future? It is important to our consideration of this group of amendments to consider what report we may get on how the Agricultural Wages Board works alongside a national minimum wage.

Mr. Boswell: My immediate reaction to my hon. Friend's perceptive intervention is to say, perish the thought. In fairness to the Government, I do not think that they have it in mind to impose, on top of the national minimum wage structure, a superstructure of wages boards. Indeed, if we are to have one or the other, generally speaking it may be worth considering a national minimum wage because of the anomalies in the various wages councils.
However, I should say quickly that the Agricultural Wages Board provides a not individually, but nationally, negotiated framework for minimum remuneration which goes far beyond the lowest possible rates and extends up to quite significant levels of remuneration. That is not the same as a national minimum wage and, in considering the long-term future of the Agricultural Wages Board, I am sure Ministers ought to want to look at that on its merits in due course. The purpose of the new clause is largely to steer them toward doing so.
There is no doubt that agriculture is currently experiencing difficulties. There is little doubt that the national minimum wage would add to those difficulties. We do not necessarily ask for special treatment—exempting agriculture just like that—but we do ask the Government to be sensitive to the sector's difficulties. We invite them to explain their amendments in greater detail and to consider the suggestion in new clause 12, which would provide for a review in 12 months' time to see whether the situation is capable of improvement—as I suspect it will be—after that time.

Mr. Ian Bruce: I am somewhat perplexed by the Bill. I came to it late, because I thought that the Labour party had made a clear commitment in its manifesto, and that the legislation would sail through, given the Government's majority. I thought that it would be a simple Bill that everyone would understand, and that we would know what hazards were involved. I did not pay a great deal of attention to the Bill until recently. [Interruption.] If hon. Members want to intervene, I am happy to take interventions at any time. I have tried to get a grip of what is happening. Perhaps I am wrong to assume that a wages council that currently has a basic rate of £1.84 for a 16-year-old would have difficulty with the Government's proposals.
The Government have gone down a complex and foolish route by trying to combine a minimum wage scheme with the Agricultural Wages Board. They should be given the opportunity in 12 months' time to review what has happened. The Bill and the amendments that the Government have been forced to table leave me perplexed.
I heard an apocryphal story about an inspector sent by the Agricultural Wages Board to see a small farmer. He questioned the farmer about the rates of pay on the farm. The farmer said, "My stockman has been with me a long time and does all the milking. He is paid £5.50 an hour. The woman who deals with the chickens is on £4.80." The inspector said, "That's fine, but I've heard rumours that you are underpaying your workers. Is there no one else?" The farmer said. "Well there's the halfwit who works 80 hours a week and gets £1.20 an hour." The inspector said, "That's ridiculous. I must meet him." The farmer said, "You're talking to him. I earn £1.20 an hour and I work 80 hours a week." That is one of the problems we shall face. The farmer is not currently covered by a minimum wage because he is probably a director or a limited company, whereas he will be covered by the Bill.
I tried to help the Government earlier by pointing out that they would have problems if they did not exclude directors, who are, in effect, self-employed. A director is different from a limited company: hon. Members often do not understand the difference. Running an Agricultural Wages Board and a minimum wage scheme will cause complications. If a report were produced, we would know what was happening and directors could be excluded.
I asked my hon. Friend the Member for Daventry (Mr. Boswell) whether the Government intended to introduce wages boards to decide the differentials for people on the minimum wage upwards. When in opposition, the Labour party fought tooth and nail to maintain wages boards. That was foolish, because wages boards did not uplift but institutionalised the pay of low-paid workers. The record that shows what happened from the time wages councils were set up until they were abolished, and even afterwards, provides no evidence of the councils helping people to get out of low pay. In many cases, they had the opposite effect, and groups of workers were kept down.
12.30 am
I repeat the minimum wage rates that were set by the Agricultural Wages Board. They are: £1.84 for a 16-year-old; £2.14 for a 17-year-old; £2.60 for an 18-year-old; and £3.06 for those aged 19 to 65. The briefing supplied to Labour Members states that people who are employed full time all year in agriculture get £4.12 and not £3.06, but that does not apply to low-paid agricultural workers. They have to get work where they can find it, and the wages board does nothing to protect them. Anyone who suggests that the rates that I have described protect people is talking nonsense.
The rates allow low-paying employers to offer £3.30 an hour, and the response to the complaint, "That is a terrible rate," is, "It is 24p an hour more than the minimum. I am a generous employer." That was my experience when I worked in an employment agency for industrial workers. The first time I came across one of the terrible wages councils was when I encountered the

Aerated Waters Wages Council. Hansard did not believe that there was such a body. It set the wages for those who put the fizz into pop. I suspect that my right hon. Friend the Leader of the Opposition could probably give us a more complete treatise on the fizzy pop industry than I could, although I was working in Yorkshire at the time. I cannot give a treatise because you, Mr. Deputy Speaker, would rule me out of order. You are my hon. Friend, but you are keen to keep us on the right route.
The Minister is one of my favourite Minister and I hope that she will explain how she intends to escape from the complications that she has got into as a result of trying to get the Agricultural Wages Board working with the national minimum wage. She is weaving a complex web, and I suspect that it will get the Government into even more difficulties.
We must examine the dilemma of a worker saying to himself, "Under human rights regulations and so on, am I getting the same deal as everybody else?" Everybody may be eligible for the minimum wage, but a small specialist group of workers may be given additional rights. I hope that the Minister will explain how the rates will operate. If the minimum wage is set at £4 an hour, will the time-and-a-half rate be calculated on that amount? What about the additions? Would we return to the agricultural rates to calculate the overtime rate and be satisfied with that as long as it was over the minimum wage rate? That is an important issue.
Agricultural wages orders not only deal with the rate for the job at a specific age, but state what the overtime rate shall be and the percentage of pay that may be taken for a cottage. They may state the allowances for a dog and for the provision of food, lodgings and so on. It is a complex web. Do we assume that the basic rate will be used in the calculations and that amounts thereafter will be based on that?
Are we saying that we trusted the Agricultural Wages Board? The Conservative Government said that they would continue to have the Agricultural Wages Board, but the Labour party never did. The Conservative Government never proposed to do away with the board, although I did not agree with that. Will all the grades just be amalgamated? Will the board be told to say that the minimum rate is now £3.50 or £4 an hour, that that has to apply to the 16-year-old and that everything from there will be ratcheted up?
One of Conservative Members' fears is that people who know that they are more skilled, more experienced—they may have worked on the farm for 10 years—and better workers than someone below them who receives the same minimum rate will ask, "What about my differentials?", even if the minimum wage is more than they currently earn. If they consider what has happened with the Agricultural Wages Board, which is affected by the national minimum wage legislation, they are entitled to ask what the situation is and how the system will operate.
We do not deal with these issues in isolation, but in terms of the real experience of the agricultural sector. Most of the farmers in my constituency tell me that they are not fearful of a minimum wage because most of them already pay all their workers above the minimum rates that were set by the Agricultural Wages Board. They assume, perhaps incorrectly, that any minimum wage will be below those.
I think that those farmers are making a mistake, but what is important is that, as we all know, a small—perhaps a 10 per cent.—difference in the value of the pound can have a dramatic effect on farmers' earnings. In the first year of this Labour Government, farm incomes have gone down by 40 per cent. The Minister of Agriculture, Fisheries and Food has said that they will go down further. He cannot promise that they will improve, and I think that he is right.
We do not know how far incomes will go down and we all know the situation for the farmer. He is all right as long as the banks are with him and he still has some cattle to sell off to keep the farm going. Farmers are fantastic at keeping going. The last people whose wages they will try to cut are their agricultural workers.
Farms are small businesses. Farmers live cheek by jowl with their work force, not hundreds of miles away. They do not, at the stroke of an accountant's pen, cut everyone's wages. They work closely with their work force. The work force continue to be paid, even when farm incomes are low, but we shall be in the strange position whereby many farmers—and most of them are in limited companies and earn wages—will have to say to their workers, "We are all going to have to work for a minimum wage. I am going to have to put my wages up because I was willing to work for nothing. I shall have to use my savings and to send the wife out to work."
Many farmers' wives work to support their husband and to keep income coming in. Farmers will have to negotiate with people who earn considerably more than any minimum wage that might be introduced and who will have to take a pay cut, perhaps down to the minimum wage—not up to it, as Labour Members believe will happen. The farmer will put his income up, not because he wants to or thinks it fair, but basically because the new Labour Government, the new people's Government, are telling him to do so.
I am extremely upset and concerned—[Horn. MEMBERS: "Ah."] I am grateful for that fellow feeling; we in Dorset need that. I wish that I had seen the many smiling faces here tonight on the countryside march the other Sunday. They would have been welcomed with open arms and would have come to understand the issues that we are talking about.
I am concerned and I think that my hon. Friends are concerned. I see avid looks on all their faces as they keenly wait to find out what the Minister is going to say. I am sure that many of them will want to comment on the Government amendments, and I will not detain the House further at this time.

Mr. Hammond: I am not a farmer, like my hon. Friend the Member for Daventry (Mr. Boswell); nor do I represent a rural constituency, like my hon. Friend the Member for South Dorset (Mr. Bruce). However, in my constituency there are a number of horticultural enterprises, and over the months, I have become aware of some of the problems facing the agricultural sector in general and the horticultural sub-sector in particular. It is common ground that in so far as the minimum wage will have an impact on the agricultural sector, it is the labour-intensive part that will be most seriously affected, and horticulture represents a significant part of that labour-intensive sub-sector.
In a sense, it is special pleading to propose a new clause that makes provision for a report on the impact of the Bill on one particular sector—in this case, agriculture. However, a certain amount of special pleading is justified, not merely because of the extreme pressure that the sector is under—an issue frequently discussed in the House, and of which all hon. Members are aware—but because, in the legislation governing wages, agriculture has a unique position compared with other sectors of industry.
The pressure that agriculture is under is well rehearsed and I do not need to recite the litany of problems that it faces, which we hear about regularly during Question Time and in debates. Suffice it to say that the National Farmers Union has calculated that a minimum wage introduced at the level of £4.61—or half male median earnings, which is the level sought by the trades unions—would cost the agricultural sector some £250 million per annum. Even if the rate were introduced at a rather more modest £3.50—a level that would disappoint many of the Minister's hon. Friends—according to NFU estimates, it would still cost the agricultural sector £43 million per annum. That is without any account being taken of the cost of restoration of differentials. I will discuss differentials later in my speech, as it is an important issue in agriculture.

Mr. Ian Bruce: Does my hon. Friend remember that literature from the old Labour party said that half male median earnings was not the end point, but the start? The Labour party made a commitment that it would start with that and then move to two thirds of male median earnings as a medium-term strategy. Has my hon. Friend, knowing that the Government are a little chary about coming in too high, made any assessment of what figure they are likely to move to and how many jobs it will affect?

Mr. Hammond: It is curious that we have not heard much about two thirds of male median earnings for a long time. In Committee, it became apparent that the Minister was not keen to talk about even half male median earnings. On my hon. Friend's question about whether I have made any assessment of where the minimum wage level might be set, I assure him that, throughout the Committee's deliberations, I and my hon. Friends did nothing but repeatedly inquire of Ministers about what level the minimum wage might be set at—but, alas, to no avail.

Mr. Boswell: Does my hon. Friend recall that the Minister expressed a certain enthusiasm for the beneficial consequences, as he saw them, of a minimum wage for jobs and growth? Was not the logic of his position the higher, the better? Is it not, therefore, strange that there seems to be a certain reticence among Ministers about introducing a high rate?

Mr. Hammond: My hon. Friend reminds me of the important contribution to economics made by the Minister in developing the upward-sloping demand curve for labour—the McCartney curve, as future generations of student will come to know it. That economic theory posits that, as the cost for labour rises, so will the demand for


it. The logical conclusion of the theory is that a minimum wage set at an infinitely high level in the United Kingdom will ensure full employment for ever more.

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I hope that the hon. Gentleman will be reminded also of the strict terms of the new clause that we are discussing.

Mr. Bercow: I am most grateful to my hon. Friend for giving way. I also note your strictures, Mr. Deputy Speaker, and shall ensure that my intervention is in conformity with them. Does my hon. Friend agree that, if the Minister has not abandoned the curve but simply hidden it, and if the Government intend, over time, to increase the national minimum wage for agricultural workers, that might well explain the Government's unwillingness to accede to new clause 12, which would require publication of a report commenting on the effect of the national minimum wage on the agricultural sector? If the Government were planning such an increase, that might well explain their reluctance—

Mr. Deputy Speaker: Order. The hon. Gentleman may have kept his remarks in order, but they were far too long.

Mr. Hammond: I thank my hon. Friend for his intervention. As he said, there may be various reasons why the Government are reluctant to have any formalised report on the agricultural sector. The direct impact of the minimum wage will be only one of those reasons.
I apologise, Mr. Deputy Speaker, for having strayed a little in my earlier remarks, having been tempted by my hon. Friend the Member for Daventry to recount to the House the economic theory proposed in Standing Committee by the Minister of State. I shall move on.
I have suggested that there is indeed a case for treating agriculture as a special case. The very existence of the Agricultural Wages Board underlines that case. Agriculture is now the only sector that has any form of statutory wage-setting arrangement. It is therefore relevant for us to examine the experience in that sector and how those arrangements have worked.
The most important factor in the wages council regime was that it was a sectoral approach, as it still is in the Agricultural Wages Board. The Government, in introducing their national minimum wage legislation, have set their face firmly against any type of sectoral approach—as they have against any regional approach or any other type of flexibility, which many people might think was necessary to ensure that a workable regime of statutory minimum wages was introduced.
The Bill's proposal to graft the national minimum wage on to current agricultural wages legislation, rather than completely to replace that legislation, is already a significant breach of the universality principle which so exercises Ministers. Alone among the sectors of the economy, agriculture will enjoy a different and distinctive regime of minimum wages—which will give rise to a problem that would be very difficult for any industry or sector to deal with, but which is particularly dangerous in a sector that is currently as fragile as the agricultural sector. I am referring to the differential restoration problem which will arise if the minimum wage introduced by the Bill is set at a level that falls between the casual

rate currently payable under the Agricultural Wages Board legislation of £3.06 per hour and the permanent full-time rate currently set by that legislation, which is £4.12 per hour.
For a fairly long time, an established and well-understood system has defined the relationship between the pay of full-time, permanent workers and that of casual seasonal workers. That is particularly important in the horticultural sector, in which a large percentage of workers are seasonal. Once the minimum wage intervenes, the higher rate will remain unchanged, but the lower rate will be brought up to whatever level is set in the legislation. Surely it stretches credulity to suggest that permanent, full-time workers in an agricultural enterprise, who have been used to earning £1.06 per hour more than the casual workers whom they are frequently supervising and controlling, will not demand restoration of the differential that they have hitherto enjoyed.

Mr. Ian Bruce: I did not mention this in my brief contribution, but—having run an employment agency and provided temporary workers for about 12 years on a very intensive level—I recall that what upset trade unions most was the fact that temporary industrial workers, in particular, were sent in at a higher rate of pay than anyone on the shop floor. Indeed, we made sure that there was a big differential between temporary and permanent workers. My hon. Friend is making an extraordinarily important point.

Mr. Hammond: I thank my hon. Friend for his intervention. As I have said, differential restoration—as a result of the cutting in of the national minimum wage between two levels of pay that already exist within an enterprise—will be a problem across all sectors of industry, but there is no other sector in which there is currently a statutory arrangement for fixing wages, and I think that it will have a particularly important effect on agriculture.
As I said, I do not represent an agricultural constituency. I hope that Conservative Members who represent rural and agricultural constituencies will be able to speak more fully than I can from my limited perspective, but let me emphasise again the problems that exist in the horticultural sector—alas, the only agricultural sector of which I have any significant constituency experience. In that sector, the minimum wage will have a significant impact.
I understand that, in horticultural establishments in my constituency, wages set by the Agricultural Wages Board are almost always the wages actually paid, according to current practice. According to my observation, there appears to be no process by which those wage rates form a floor. They are the accepted going rate for the job and, when they are uprated annually, wages are uprated accordingly. This is not some theoretical construct according to which—as may obtain in many other sectors—wages are paid at higher levels. In the case of the horticultural sector and, I suspect, more widely in agriculture, the rates of pay laid down by the Agricultural Wages Board are the rates currently paid.
The arrival of the minimum wage will provide a dislocation and a shift in those arrangements. It will provoke not only a burst of differential restoration, but some industrial relations difficulties, as it will upset a very


well-established and widely accepted regime of wage rates at a time when many producers, particularly in the horticultural sector, are suffering the effect of the strong pound sterling. Many of the products that are produced in my constituency for supermarkets in the United Kingdom are forced to compete with products grown abroad—particularly in the Netherlands, which has seen the value of its currency depreciate significantly against the pound in the past 18 months.
Producers of specialised horticultural products are price-takers, unable to affect the market price. Horticultural products are often grown to a specific picking date and have to be sold on that date. They are planted and harvested according to a strict rotation. On the date when they are delivered to market, the producer is, effectively, a price-taker and has to accept whatever price the market sets. Horticultural producers have seen prices in sterling decline by about 25 or 30 per cent. over the past 18 months.

Mr. Ian Bruce: My hon. Friend is modest in saying that he knows little about these issues as he clearly knows a great deal. Almost all hon. Members have a big interest in agriculture because their constituents are consumers. Does my hon. Friend recall the McCartney curve, whereby as people get more money, they can go out and buy more goods? Will not an increase in agricultural wages almost certainly put many people out of work? They will then have no money to put into the local economy, and everyone will suffer the effects.

Mr. Hammond: I thank my hon. Friend for that intervention. I shall not risk your wrath, Mr. Deputy

Speaker, by being tempted into an analysis of the finer points of the theory of the McCartney curve. I agree, however, that people with no jobs are unlikely to be effective consumers.
The impact of the minimum wage legislation will be felt most seriously in sectors of industry and business where the United Kingdom is vulnerable to imported competition. We debated the matter extensively in Committee, and we all understand that in certain sectors where low wages are paid, such as the service industry, the economic impact of imposing a statutory minimum wage is not as serious as it might be in a sector that is vulnerable to imports for the simple reason that, in most cases, there can be no substitution by imported services. The agricultural sector, however, and the horticultural sector specifically, are significantly vulnerable to imports.
The fact that British agriculture is under extreme pressure—for a variety of reasons that we all know—coupled with the strength of the pound makes this absolutely the worst moment to impose a double-jeopardy burden on the industry. Unlike the rest of British business, people engaged in agriculture will be faced not merely with the national minimum wage as a statutory requirement, but with the national minimum wage plus the higher levels of Agricultural Wages Board rates that have been set and will continue. In addition to that panoply of regulation, they will have to deal with the upward pressure on those higher rates of wages caused by the inevitable clamour for differential restoration as the minimum wage rate cuts in and subsumes the lower parts of the structure within the existing Agricultural Wages Board system.
I support the new clause. By drawing attention to the specific concerns of agriculture and its special position, it does a great service, and would greatly enhance the Bill.

Mr. Letwin: I cannot match the sustained eloquence of my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) and the wide scope of his inquiries into the effects on agricultural wages. I should like to raise with the Minister a particular set of problems that arise in connection with the Agricultural Wages Order 1997. The new clause would permit the Government and the various agencies to investigate those circumstances 12 months ex post. Perhaps the Minister could explain in advance how the circumstances have been approached and thus remove at least one reason why the new clause is necessary.
1 am
I draw the Minister's attention to paragraph 6(9) of the Agricultural Wages Order 1997—with which she is no doubt familiar—which deals with standby duty rates, an important feature of agricultural wages in my constituency. The workers are not standing by in the sense in which dockers were paid to stand by when they watched ships being loaded under the dock labour scheme. That was a form of diseconomy institutionalised by the dock labour scheme and the Jones-Aldington arrangement.
Standby duty rates have a great economic significance in agriculture. The flexibility of farm labour depends in some circumstances on having individuals available for duty but not present on the farm and working at a given moment, as hon. Members on both sides of the House who are familiar with the issues know. The Agricultural Wages Board has taken that into account for many years and has established specific standby duty rates.
That makes the new clause necessary and provides an interesting test of the principle of minimum wage legislation. Paragraph 6(9) of the order gives the minimum standby duty rates. The rates increase for those between the ages of 15 and 18, with the top rate applying to those aged 19 and over. I shall not refer to the rates that cover those between the ages of 15 and 18. The Minister has no doubt considered the issue and would argue that the possible exemption of those under 26 could apply.

Mr. Hammond: Does my hon. Friend agree that it is not clear how the agricultural wages legislation will interact with the minimum wage legislation on that? It is not yet clear how waiting time and standby time will be treated in calculations of whether the minimum wage has been paid.

Mr. Letwin: I am grateful to my hon. Friend. That is my point.
The category of those who are 19 and over includes those between the age of 26 and retirement age. The standby duty rate per whole standby duty day is £16.50. The number of hours implied is in doubt. It would be reasonable to assume that we are talking about an eight-hour day. It does not take any elevated

mathematics to divide eight into £16.50 and find that the implied hourly rate for standby duty is just above £2—presumably well below any minimum wage.
That is a vivid example—not unique, but nevertheless most striking—of the conflict between the minimum wage provision and the structure of the Agricultural Wages Order, which we must remember has been developed not by accident but in response to the very particular circumstances of agricultural labour.

Mr. Boswell: My hon. Friend is making a perceptive speech. Does he agree that, for the time being, the Agricultural Wages Order is the responsibility of a board which has a very high proportion of representatives from both sides of the industry, together with a significant number of independent members? They should know what they are talking about.

Mr. Letwin: I am grateful to my hon. Friend, who is absolutely right. I can go further. I have taken the trouble in the past few days to talk to a number of my constituents—[HoN. MEMBERS: "For a change."] I am grateful to hon. Members for their confidence in my constituency activities. I have talked to constituents who are on both sides of the fence: employers, who depend on the level of flexibility of standby duty, and those who benefit from the possibility. I asked them quite specifically how they would feel if the minimum wage legislation rendered it impossible to continue with standby duty at the rate specified by the Agricultural Wages Order. The response has not been favourable. I expect that it would not be favourable in many rural constituencies.
I hope that the Minister will be able to give the House a specific solution to this problem that shows that she and her officials have properly considered and have accommodated in the minimum wage legislation what is, after all, a major element of the Agricultural Wages Order, which has been much debated in the past. We could then rest easy: the Minister would have passed the test. I fear, however, that we shall not hear such an explanation.
I have to admit that, unfortunately, I was not a member of the Standing Committee. I have however read very carefully the entire lengthy debate in Committee on the relevant clauses—clauses 43 and 44 as they were; clauses 44 and 45 as they are—and found not the slightest reference to the issue to which I have referred. I find that surprising. I would have expected the Minister to vouchsafe such an explanation if it existed. That makes me think that this is a lurking problem that has not been properly explored.
I draw the House's attention to the fact that the new clause does not seek specifically to remedy the defects. That would be misguided because there are too many such possible defects in the Agricultural Wages Order from the point of view of its interaction with the minimum wage legislation. On the contrary, we are seeking, as we did in the previous debate, to protect the Government from themselves, and to protect the Bill from its latent defect.

Mr. Ian Bruce: I have had the honour and the privilege of listening to my hon. Friend talking to farmers in his


constituency and I know how appreciative they are of his perception on the issue. [Interruption.] The Liberal Democrats are heckling, trying to—

Mr. Deputy Speaker: Order. May I remind the hon. Gentleman that he should be addressing the Chair, not simply turning to his hon. Friend?

Mr. Bruce: I was reluctant to say that the Liberal Democrats were heckling because I knew that you, Mr. Deputy Speaker, were being very attentive. Has my hon. Friend the Member for West Dorset (Mr. Letwin) ever—

Mr. Deputy Speaker: Order. I am trying to persuade the hon. Member that he should be addressing me.

Mr. Bruce: I thought that I was. Perhaps I was looking in the wrong direction at the same time. Perhaps, looking you directly in the eye, Mr. Deputy Speaker, I may ask my hon. Friend whether he has ever found a group of workers who were not overwhelmed and overjoyed to be given money in their hands to sit at home on standby, waiting to be called in to work. That happens not only in agriculture but in many industries, and we need to know what the Minister is doing about it.

Mr. Letwin: My hon. Friend makes a correct and helpful point. [Interruption.] It is helpful indeed, as hon. Members below the Gangway are helpfully adding, because it draws attention to the importance that individuals attach to that. However, I go further, because the important issue here, as in relation to many aspects of the Bill, is flexibility, which enables some of those workers in my constituency to be employed.
That is the point at which we cease to deal with a laughing matter and start to deal with something of the utmost seriousness. The need for flexibility is obvious in other parts of the Bill, but we are discussing new clause 12, which does not mandate a specific solution to the problem. It specifically makes it possible for the admitted experts, chosen by the Government, to review the situation at a decent interval, 12 months hence, and to ask themselves whether the interactions between the minimum wage legislation, the Agricultural Wages Board and the Agricultural Wages Order are such as to avoid any inconvenience.
I am sure that the omission in the Bill is an oversight on the Government's part. I am sure that the Government have no intention of throwing people on the dole heap because of a mistake in the implementation of the Bill in relation to the Agricultural Wages Order. I am sure that, if the Government carefully consider the matter—if they are unwilling to do so tonight, perhaps they will do so in another place—they will wish to reinstate something very similar to new clause 12, but slightly differently worded.
My hon. Friend the Member for Daventry (Mr. Boswell) tabled new clause 12 in all seriousness. I beg the Minister to take it in the spirit in which it is intended, and to look carefully at the Agricultural Wages Order, especially at paragraph 6(9), which has unfortunate consequences in the absence of a new clause along the lines of new clause 12.

Mrs. Roche: Once again, we have had a wide-ranging debate. That may be the kindest thing that I can say about

the contributions. None the less, I shall do my best to keep in order, and to speak to new clause 12 and to the Government amendments in the group.
New clause 12 seems to bear a fair degree of similarity to a new clause that was proposed in Committee by Conservative Members. Once again, we are in the territory of the interface between the national minimum wage and the agricultural minimum rates; the relationship between the Low Pay Commission and the Agricultural Wages Board; and the forthcoming review of the Agricultural Wages Board.
In Committee, I explained in general terms the key principles that we are seeking to follow in applying the national minimum wage to the agricultural sector: first, that the minimum wage should apply in the agricultural sector as elsewhere; and, secondly, that we should not seek to make wholesale changes to the existing agricultural wages regimes in England and Wales, Scotland and Northern Ireland.
New clause 12 would require the Low Pay Commission and the Agricultural Wages Board to report to the Secretary of State and the Minister of Agriculture, Fisheries and Food within 12 months of the national minimum wage being set. The report would cover the operation of the clauses in the Bill that govern the interface between the national minimum wage regime and the agricultural wages regime.
In effect, the new clause would pre-empt the discretion of the Secretary of State to determine the timing and the nature of any future referral to the statutory Low Pay Commission. Of course, the Secretary of State might wish the Low Pay Commission to consider agricultural issues at some time. As the House knows, the Government's evidence to the commission includes a discussion of the agricultural sector. However, new clause 12 requires a joint report to be prepared within a year of the minimum wage being set. We feel that that is quite arbitrary.

Mr. Boswell: I would not necessarily want the Minister to commit herself to having a joint report, but does she agree that it would at least be worth considering whether it might be to the benefit of both the Low Pay Commission and the Agricultural Wages Board if they considered the matter together rather than separately? They are more likely to get it right if they do.

Mrs. Roche: I understand the hon. Gentleman's point. He has made it before and I understand the way in which he puts it. However, at this stage I would not want in any way to pre-empt what the Secretary of State might want to do on some future occasion.

Mr. Hammond: rose—

Mrs. Roche: I will not give way as I want to make some progress, if I may. New clause 12 seems to suggest that the Low Pay Commission should inevitably be involved in the forthcoming review of the Agricultural Wages Board, which is planned by the end of 1999. Such a review was last carried out in 1993 under the previous Conservative Government. I cannot resist pointing out a fundamental inconsistency that the Opposition display time and again. The previous Government decided that they would retain a statutory minimum pay regime for


agriculture alone. So, Conservative Members have already conceded the principle that there should be a minimum pay rate, although one would not know that from some of the contributions made this evening. For various reasons, which seem unclear, they want to confine it to one sector—agriculture—but low pay is low pay wherever it occurs. That is why the Bill will apply in every sector. The Opposition seem determined to let low pay continue and that is why they have consistently opposed the Bill.
For the 1999 review, there will be a full consultation and views will be requested on the way in which the two systems are operating together. Of course, the Low Pay Commission could be asked to contribute to the 1999 review, but we are not saying now that it must take part. The essential difference between the Government position and that outlined in new clause 12 concerns flexibility. The Secretary of State can refer any matters to a statutory commission, if such a commission is appointed. No doubt, we will consider that possibility nearer the time of the general review. Therefore, the new clause is unnecessary and, if Opposition Members persist with it, I must ask the House to reject it.

Mr. Hammond: I thank the Minister for giving way just before she concludes. Does she agree that one of the benefits of the new clause would be that it would send a clear signal to the agricultural community that there is a recognition of the special problems under which it is labouring and that the Government recognise that up front and are prepared to say that there will be a review at a fixed point in time?

Mrs. Roche: The Government are doing that already, as is shown by the amendments. We have argued that the two regimes should exist side by side, and there is to be that review in 1999. As I said, it will be a full consultation.

Mr. Ian Bruce: The hon. Lady is always most courteous. If the report is simply from the Agricultural Wages Board, the Government will know what is happening only as regards minimum wages within agriculture. The Low Pay Commission may well want to make recommendations. The old Labour party wanted all industries to have some form of wages board. With a majority of 77, I acknowledge that many of my constituents voted for a Labour party that was going to bring back wages councils, and we believe that new clause 12 would allow the Government to do that. Does the Minister intend to bring back wages boards throughout industry?

Mrs. Roche: The next review of the Agricultural Wages Board would have been this year, but the Government decided to postpone it until late 1999 to take account of the introduction of the national minimum wage. That is a clear, sensible and coherent way of moving the system forward.
The Government amendments make further changes to the Agricultural Wages Act 1948 and the equivalent legislation in Scotland and Northern Ireland. They are intended to clarify and remove possible ambiguities in the application of the Bill to the agricultural regime. They fall naturally into two subgroups: amendments Nos. 29, 36 and 30, which deal with supplemental agricultural minimum rates—such as the night-work premium,

to which the hon. Member for Daventry (Mr. Boswell) referred—and amendments Nos. 31, 32, 37 and 38, which deal with the overlap between enforcement powers.
Amendments Nos. 29, 36 and 30 were designed to deal with a technical problem in the Bill's drafting, arising from the fact that where the Bill changes the agricultural wages legislation—for example, in schedule 2, paragraph 2(2), which incorporates a new subsection (2B) into the Agricultural Wages Act 1948—it sets out the requirement that
No minimum rate…shall be less than the national minimum wage.
That is fine for the basic agricultural minimum rate, as the intention has always been that agricultural workers should receive no less than the national minimum wage.
The drafting leaves a question mark over the various other agricultural rates and supplementary allowances, of which mention has been made. It could be read as meaning that the other supplementary rates should also be at least at the same level as the national minimum wage. Amendments Nos. 29, 36 and 30 make it absolutely clear that the requirement that an agricultural minimum rate must be no less than the national minimum wage applies only to standard time, or piece-work rates of pay. They explicitly disapply that requirement in respect of supplemental or additional agricultural minimum rates.

Mr. Letwin: Will the hon. Lady give way?

Mrs. Roche: No. I want to make some progress, if I may.
Holiday pay and sick pay are in a slightly different category, as they could be viewed as substitute pay rather than supplemental allowances. The amendments confirm that the requirement that an agricultural minimum rate must not be less than the national minimum wage will not automatically apply to holiday pay and sick pay for agricultural workers, unless the national minimum wage is determined, under regulations made under clause 2, as being payable generally in respect of time when a person is on holiday or sick.

Mr. Boswell: I am not sure that I have the matter clear, so I should be grateful for a further explanation. Bearing in mind the helpful comments of my hon. Friend the Member for West Dorset (Mr. Letwin) on standby rates, I think the hon. Lady is saying that the national minimum wage should apply to the basic rates. I have been critical of that, as I have objected to the exclusion of any additional component from the equation. Is she now saying that each of the additional components will not have to apply to the separate national minimum rates? If so, is that also the case for standby rates?

Mrs. Roche: The change is set out in the amendments. The national minimum wage will apply only to standard time or piece-work rates of pay. I give an example. The hon. Gentleman has already mentioned the "dog allowance", as it is sometimes known. No one is suggesting that the shepherd must be paid at least the rate of the national minimum wage for his dog over and above the standard rate of pay, which must be at least the level of the national minimum wage. We want to clarify some of the points that were discussed in Committee.


Amendment No. 29 deals with the situation in England and Wales, and amendments Nos. 30 and 36 make parallel changes in Northern Ireland and Scotland.
By contrast, all agricultural pay rate entitlements will be enforceable under the national minimum wage enforcement provisions as applied to agriculture. The amendments make that clear. Amendment No. 31 deals with the situation in England and Wales, and amendment No. 32 is a consequential amendment to schedule 3. Amendments Nos. 37 and 38 make parallel changes in Scotland.
The amendments may appear complicated, but they all contain commonsense measures that will remove possible doubts as to the Bill's effects in agriculture. We have always been aware of the need to ensure that the interface works effectively and without difficulties, and that is what the amendments are designed to do. I commend them to the House.
If Opposition Members press the new clause to the vote, I urge the House to reject it.

Mr. Edward Leigh: It struck me that much of what the Minister said was irrelevant to the real problems of the countryside. I am acutely aware of those problems, as I represent a large arable constituency.
I made the effort to obtain the latest documents from the Agricultural Wages Board. To read them, one would think that, if the lot of the agricultural labourer was not exactly rosy, the board was at least maintaining his position in society. That is true at one level. For instance, we know that the average weekly earnings of whole-time hired men aged 20 and over increased by approximately 2.5 per cent. in 1996, from £237 to £243. That is hardly a king's ransom, but at least, as the report makes clear, it
represents a maintaining of earnings in real terms, when deflated by the RPI.
It is simply not the case that agricultural labourers are maintaining their position. That is why the new clause should be carefully considered. Agriculture in general is in crisis. On arable farms in my constituency the work force has been cut in recent years by a quarter.
Whole areas of our countryside are being depopulated of workers. That has nothing to do with wages and everything to do with the new forms of agricultural production. The city dweller—[HoN. MEMBERS: "What about the new clause?"] What I am saying has everything to do with the new clause, which is designed to bring to the Government's attention the problems of agriculture and the fact that there should be a proper review.
The Minister did not address the crisis facing agriculture. The Government need to take the crisis seriously and to understand that it goes wider than the question of wages. The city dweller has a rosy view of agriculture.
The agricultural labourer is effectively being deskilled. He used to be held in high regard because of his awareness of the local subtleties of the soil and so forth. Now so much of agriculture is related to agribusiness and the ethos of his life and his skills are held in far lower regard. The Government must take action. They cannot

consider the crisis simply in terms of wages: they must consider the wider problem and try to bring back to the agricultural labourer real pride in his work.

Mr. Deputy Speaker: Order. I remind the hon. Gentleman that it is not sufficient to make occasional reference to the new clause. He must address his remarks directly to the new clause and not make a Second Reading speech.

Mr. Leigh: I am grateful to you for your guidance, Mr. Deputy Speaker. I have made my point and, although the hour is late, it is a point that will be made again and again by my hon. Friends and myself who hold the countryside in real regard and are deeply concerned about what this Government are doing to it.

Mr. Boswell: This has been an interesting debate, which has ranged from dogs and night rates—as opposed to nitrates—to the overall state of agriculture. My hon. Friend the Member for Gainsborough (Mr. Leigh), who has just made his first contribution to our deliberations, has performed a service by reminding us that man does not live by bread alone, and that the countryside has spiritual as well as economic problems. However, it may be difficult to solve them by the introduction of a new clause, even one as modest and as ingeniously drafted as new clause 12.
I thank the Minister for her explanation of the Government amendments. I find it a little difficult—not wholly because of the hour—to unpick the finer meaning of her speech, because the subject is so complex. Her clear explanation merely reinforces my support for new clause 12, because the impact of the interaction of main and additional rates should be considered alongside the issue, which we discussed in Committee, of the impact of pay reference periods—a doctrine from the National Minimum Wage Bill7—compared with the non-existence of such periods in the agricultural wages legislation. The issues are complicated, and that fact itself makes the case for a joint review some 12 months from now to examine the way in which the legislation is working.
I look the Minister straight in the eye and invite her to reflect on whether she can search her conscience and assure us that no further amendments will be introduced to make the two pieces of legislation work more closely together. We have already seen more than a dozen such amendments, and, if one is a buff of the agricultural wages legislation, one begins to doubt whether the cascading process of change has yet come to an end.

Mr. Ian Bruce: I listened carefully to the Minister, and I am concerned to hear my hon. Friend suggest that the Government should not reconsider their position. I did not hear the Minister say anything about the standby rates. The Bill is defective, so we want the Government to table additional amendments when it is considered in the House of Lords.

Mr. Boswell: I was, I hope, suggesting to the Minister that she might consider that point. If the choice is between leaving the Bill in an unsatisfactory or unclear condition or amending it to make it clearer, I would settle for one


or two more amendments if they improved the Bill, despite the fact that I have castigated the Government on their cascade of new amendments.
The Government should reconsider the situation, and the Low Pay Commission and the Agricultural Wages Board should also be asked to examine the issues. We have all been studying the Agricultural Wages Order 1997—my hon. Friend the Member for West Dorset (Mr. Letwin) more assiduously than anyone—but we can all make mistakes on the details, and I wish to correct the record on a point that I made. I said that the standard rate for farm workers was £4.17 an hour when it is £4.12. That is one of those King Charles's heads that I have had throughout our proceedings. I think that I saw the figure mistyped in something such as my NFU Journal. It has stuck in my mind, and if one can consistently waver, I have done so between the two figures. It is £4.12; I checked the order.
It is a serious point: the orders are complex, and it is important that they work properly. To use a phrase that we have not used tonight but that the Minister of State used extensively in Committee, it is important that the Bill is not discredited. We urge the Under-Secretary to continue to reflect and analyse and to make any appropriate changes.
I would not like to close without passing reference to the concerns expressed by my hon. Friend the Member for Gainsborough and others about the state of agriculture. The Minister knows that this is a difficult time to introduce a national minimum wage. That reinforces the argument for a proper review in about 12 months. Opposition Members know that, every time the Government reach a difficulty, and sometimes when they have not reached one, they review the situation. They are doing so to the tune of more than 100 reviews. One more in a good cause would not be inappropriate.

Question put and negatived.

New clause 14

FINANCIAL STATEMENT AND BUDGET REPORT

'. The Chancellor of the Exchequer, acting in consultation with the Secretary of State, shall include in the Financial Statement and Budget Report an assessment of the cost of the national minimum wage to Her Majesty's Government in respect of employment costs in the public sector.'.—[Mr. Boswell.]

Brought up, and read the First time.

Mr. Boswell: I beg to move, That the clause be read a Second time.
It is interesting that we are now making excellent progress, and coming to the end of the new clauses. It is always right to end with a bang not a whimper, and this is an important new clause.
The concerns expressed in new clause 14 may seem some way from those that have just been expressed about agriculture, because the clause provides for something different. It provides for something topical, which I would loosely call seasonal. It imposes a duty on the Chancellor of the Exchequer. Some of us like the idea of imposing a duty on him slightly more than that of his doing so on us, as I fear he may do shortly.
The Minister need not feel left out, because the duty is to be performed in consultation with the Secretary of State. It is to include in the "Financial Statement and Budget Report", or Red Book, as we used to call it before it unaccountably changed colour,

an assessment of the cost of the national minimum wage to Her Majesty's Government in respect of employment costs in the public sector.
That is obviously important for the overall implications of the minimum wage.
It was clear when we at last sighted the Government's evidence to the Low Pay Commission, two thirds of the way through the Committee, that they were also somewhat exercised about the matter. The extent of their concern is the only logical explanation for the fact that, while 600 other organisations had got round to doing their submissions to the commission in the six months after its establishment last July, the Government were unable to. Like the apostle Paul, the Government regarded themselves as born out of due time, but in the end they got their submission in.
I defer to my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), in his detailed knowledge of Whitehall-speak, of which he has even more experience than me, but it is possible by looking at the Low Pay Commission to see storm cones being hoisted, expressions of distress being rehearsed and very clear messages being transmitted in the most opaque Whitehall language.
If I were the chairman of the Low Pay Commission, who is no doubt doing an excellent job—and, even at this hour of the morning, I am glad that it is he and not I who has that task—I should be able to pick up those signals which say, "Whatever the Low Pay Commission recommends, please do not set a rate too high." The whole thing depends on a moderate rate being set for the national minimum wage. That will, of course, disappoint some Labour Members, but too bad—the interests of the economy demand that the rate should not go too high.

Mr. Hammond: May I remind my hon. Friend that, with the financial memorandum that appeared with the original draft of the Bill that was considered in Standing Committee, the Government spoke of setting a sensible rate, which would have no effect on the level of employment? Would he care to comment on that?

Mr. Boswell: Yes—the short answer is, I do not think that that was a starter then, and it certainly is not now. It is virtually impossible for the national minimum wage legislation to do something without doing some harm.
That fact emerges clearly from the Government's evidence to the commission in relation to what is described as the "Exchequer implications". That category is a wide one, and the implications are set out extensively on pages 19 and following of the Government's evidence, but I shall start by quoting the reference at the beginning to their concern. Their evidence states:
However, for a given inflation target and assuming the underlying productive potential of the economy remains unchanged, then there will be an offset from reductions in the tax take elsewhere.
That is understandable.
If the minimum wage were set at a level which resulted in a fall in productive potential, then we would expect an adverse effect on net tax revenues.
That is a storm cone—one that is hoisted even more explicitly in paragraph 97, which is the final paragraph dealing with the impact on the Exchequer. It states:
If the national minimum wage is sensibly set at a level where real GDP and employment are left unchanged, then the net effect on the public sector borrowing requirement is likely to be


relatively small. At higher levels of the minimum wage, the potential for adverse effects on tax revenues and public expenditure increases, with the risk of an adverse effect on the PSBR.

Mr. Ian Bruce: I have been lent a copy of the financial memorandum, which is apparently not reprinted for debate on Report. One reading suggests to me that the Government have decided to set the minimum wage at the lowest rate paid to anybody they currently employ, which is an extraordinarily low rate in comparison with what was talked about previously. Have the Government indicated that that is precisely what they are trying to do?

Mr. Boswell: If there were to have been such indications, they would have been suppressed, because that would not meet the political objectives of Labour Members. As an ex-Education Minister, I know that, whereas the Department for Education and Employment pays £4.91 in London, the lowest rate paid in the provinces—probably in Darlington or Sheffield, where it has major establishments—is £3.59. That shows the differential between London and the provinces, and I leave the House to speculate which of those two rates is likely to be nearer the rate set for the national minimum wage.
It is clear that any upward movement is likely to have an effect, both directly on the costs to the Exchequer of employment, and indirectly through its effects on differentials.

Mr. Lansley: Before my hon. Friend moves on from that point, has he observed that the Government present in their evidence to the Low Pay Commission a graph illustrating the cost impact?

Mr. Boswell: indicated assent.

Mr. Lansley: My hon. Friend indicates that he has seen it. Although it takes no account of differential implications, is it not significant that the gradient on that graph begins to sharpen substantially at £3.60? That is precisely the rate that the Government are trying to spin should be the appropriate rate, which would presumably serve their own purposes in respect of public sector and Exchequer implications.

Mr. Boswell: I am sure that my hon. Friend would not be so unworthy as to suggest that the Government would put a spin on anything, or would seek improperly to influence opinion. I was about to refer to that graph, because it is germane to our discussion.
I commend the Government on their record on public sector pay. Perhaps I should commend the previous Government, as the regime was set by them. A comparatively small proportion of the public sector is paid at a rate below £3.50 an hour. Only one in 10 of the labour force at that lower level are employed in the public sector.
The legislation will have an impact in various ways. There will be a direct tax impact, and there will be savings on in-work or out-of-work benefits, which is a sensitive subject. Differentials must also be considered. There are consequences for the Government's activities, which centre on the national health service. The Government say in their evidence that the Department of

Health is undertaking a survey of NHS earnings, and will submit cost estimates. Those estimates have not yet been sighted, and I dare say that the Chancellor will not find them very congenial.
There will also be indirect effects. Charities and other not-for-profit organisations carry out important social care activities on behalf of Government. The residential care sector is one of the low-paying sectors of the economy. The Government's evidence shows that 142,000 cases in the United Kingdom have preserved rights to specific help with charges, and the median wage for care assistants was £4.29 an hour in 1996. Apart from those specific preserved rights, other elderly residents of care homes will expect to face higher charges as private sector homes have to meet the costs of the national minimum wage. That will in turn generate demand for further benefits.
There will be a knock-on effect on benefits if the Government are minded to improve benefits for child care. That is also referred to in the Government's evidence. It is suggested that over 30,000 cases already receive extra benefit to help with child care charges. The average wage in the child care industry, excluding nursery nurses, was £3.85 an hour in 1997.
The appendices to the Government's evidence give an overall figure of two thirds of a million people employed in various aspects of the care industry. Not all are low paid, but one would expect wages in that industry to rise. Given that it is largely publicly financed, directly or indirectly, there will be a significant impact on public revenues.

Mr. Ian Bruce: Is my hon. Friend as confused as I am by the way in which the Government give out statistics? When they want to show that any rise will cost industry and the Government very little, they say that hardly anybody is being paid below the figure they are considering for a minimum wage. However, in the rest of their rhetoric, they tell people that the greatest scourge of British industry and commerce is that literally millions of people are rushing about for £1 or £1.50 an hour. Has my hon. Friend been able to get to the bottom of why the Government are so schizophrenic, so Jekyll and Hyde, on this issue?

Mr. Boswell: Up to a point, I have not been able to get to the bottom of that. Perhaps the Low Pay Commission will do that for us. The facts that I am setting before the House are incontestable. The general impact on tax revenues will depend on what happens in the economy generally. We think that the legislation will make the economy less competitive and will have a long-term effect on the gross domestic product. That will tend to increase the net cost of the operation.
I acknowledge that the changes are speculative, and I shall return to the table to which my hon. Friend the Member for South Cambridgeshire referred. It shows potential national minimum wage rates of between £2.50 and £4.75 an hour plotted against the increase in total labour costs and the number of workers who will be affected. It would not be feasible, and would probably be out of order to display the chart in the House, so I shall do no more than say that the two curves tend to move more or less in step: they are not widely divergent.
I shall concentrate on the cost curve rather than the number curve. The impact starts to accelerate at a minimum wage of about £3.50 to £3.75 an hour. An interpolation from the table shows that a hypothetical minimum wage of £3.75 will cost £220 million a year in direct labour costs alone. However, if the minimum wage were edged up by only 25p an hour to £4, that cost would almost double, to more than £400 million. There is a huge escalator effect, or, as it was elegantly put earlier, the steep gradient on the economic curve kicks in at that minimum wage range.
The calculation makes no significant allowance for pay differentials. When we add those, the figures become even more horrendous. One can thoroughly understand why, according to the bits of the Whitehall debate that are revealed one way or another in the newspapers, the Chancellor has been campaigning for a modest rate, and is very concerned at the suggestion by what might be termed the traditional wing for £4, or a half-male median earnings rate, which is interpreted most accurately as about £4.61. The Chancellor is dead worried about that.
Evidence from the Department of Trade and Industry, no doubt influenced or sanitised by the Chancellor, shows that it is saying, "Please do not set a rate that is too high, because, if you do, the escalator, the cost impact, will rise dramatically." It is also expressing grave reservations about a substantial rate for those under the age of 26. We shall come to that later.

Mr. Syms: So far, the Government have not said what the rate will be, or whether there will be annual rises or rises every two, three, four or five years. The legislation will have a major impact on the public sector, which is why the amendment is well judged.

Mr. Boswell: I am grateful to my hon. Friend for his intervention.
What is becoming clear, even from my limited researches into the matter, is that we cannot have the final answer, because we do not have the rate. The commission will not be able to estimate the results until it has considered the evidence, and produced its estimate and then its recommendation. However, matters will change over time. They will change with the course of the economy, with the interaction between the various effects that I have mentioned, and as a result of tax changes.
For example, if the Chancellor introduced a somewhat different regime for child care in his forthcoming Budget, it would have an immediate repercussive effect if it cost much more than it was thought to. Conversely, any concession might be worth much less than was claimed, because the whole cost of child care would be influenced by whatever rate was chosen.
The new clause says that this should be run by the House and by the electors, annually, as part of the Budget process. The "Financial Statement and Budget Report" has been refined over the years. It is a useful working document, explaining much statistical information about the conduct of the economy. The Government influence their figures directly. It is, as it were, an internal loop, where Government decisions about the national minimum wage, albeit based on advice, feed directly into some of their costs, which then have to be catered for and met.
We think that it is entirely appropriate that the calculations that Whitehall will carry out for itself internally as part of the discussion on the rate to be

chosen, should be made explicit and public, so that we can all understand, both this year and in coming years, what is going on and what the Government have done for themselves and their finances.

Mr. Collins: New clause 14 has particular importance in the light of an important story relating to the Chancellor of the Exchequer and his responsibilities, which is to appear on the front page of The Guardian this morning, which will inform a no doubt startled world that the Chancellor has been in the habit of sending four-page glossy leaflets to senior Labour party figures throughout the country, and which quotes a friend of the Chancellor as saying that of course he does not expect the Prime Minister to resign, but thinks that, at some point, he may decide to step down in his favour.
That is why new clause 14 is so important. It would help to focus the Chancellor's attention on the role that he is supposed to be discharging: propagating not his career at the expense of his erstwhile Cabinet chum the Prime Minister, but the future of the British economy and, in particular, employment prospects in that economy. New clause 14 will serve an important purpose in not just focusing his attention on those things, but requiring the whole Government machine to assess each year the Bill's implications.
We all know how important the Treasury is to the running of central Government. It is the focus, the hub and the humming machine at the centre of the British Administration, and it is important that it should be able to have the locus, whether it be through the annual public expenditure round or the Budget process, as required in new clause 14, to assess every 12 months the impact of the national minimum wage. There are several ways in which the national minimum wage can impact substantially on Budget assessments.

Mr. Hammond: Does my hon. Friend agree that, in view of speculation that the annual spending round may be consigned to history, it would be infinitely preferable for the assessment to be done by means of the Budget report, as proposed in new clause 14?

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Mr. Collins: I am most grateful to my hon. Friend, who has made a helpful point. Indeed, I was intending to deal with the impact of some of the stories in the Sunday newspapers, which underline the importance of new clause 14.
Clearly the newspapers were heavily briefed by people high up in the Treasury and close to the Chancellor. One imagines that Mr. Charlie Whelan was once again on his mobile phone in the Red Lion. The relevance of this to new clause 14 is that the stories said that the Chancellor was likely to announce in his Budget not only the abolition of the public spending round, but that there would be below-inflation increases in public expenditure across all Departments for the entirety of this Parliament.
The point about new clause 14 is that, in the light of that commitment, the Chancellor would have to assess how he could possibly reconcile the commitment to a national minimum wage—with pressure from the Low Pay Commission for it to be uprated year in, year out—with a policy announcement to keep to below-inflation increases in public expenditure in every Department.
There are only two ways in which the Chancellor could do that. The first is to decide to keep the minimum wage up, but public expenditure as a whole down by sacking people in the public sector. Many of the people we are used to being advertised in Labour party propaganda as the principal beneficiaries of the Bill—cleaners in hospitals and other people doing important and valuable, but low-paid, work in the public sector—would find the immediate effect of the Bill to be the loss of their jobs.

Mr. Lansley: Does my hon. Friend agree that, without new clause 14, there is a danger that the Treasury would simply treat additional sums of money spent in the health service to meet compliance costs associated with the national minimum wage as additional spending on health services? It would be much to the advantage of the health service and those affected by it to be able to isolate the costs of meeting the national minimum wage from the genuine increases in resources available to provide additional treatments for patients.

Mr. Collins: My hon. Friend makes an excellent point, and all the more excellent because it was to be my very next point.
As I said, there are two ways in which the Chancellor could try to reconcile the two differing elements. The second is, as my hon. Friend suggested, that the same number of staff are paid at the level of the minimum wage, but the Chancellor merely takes out of service provision funds that would otherwise have been available for that purpose. New clause 14 is important, because, if that is what the Chancellor intends to do, he should be required to say so, on the record, in his Budget statement.

Mr. Hammond: Has it occurred to my hon. Friend that there may be a third route? The Secretary of State for Health may be encouraged to follow the Secretary of State for Defence in seeking an opt-out from the Bill for the national health service.

Mr. Collins: My hon. Friend's ingenuity has exceeded mine. I admit that that route had not occurred to me. Of course, he is quite right. Given the importance that both sides of the House attach to staff in the NHS—sas we do to staff in the armed forces—there is some logic and force in his point.
New clause 14 would require all Departments—not just the Chancellor of the Exchequer, because, as he assembles the material for the Budget statement, he is acting on behalf of the Government collectively, and he collects information from all Departments—to focus on the serious impact of the minimum wage on their public spending plans.

Mr. Bercow: Does my hon. Friend agree that, if the Chancellor chooses to allow an increase—perhaps an annual increase—in the minimum wage, and then sacks people in the public sector in order to meet his other objective of containing overall public expenditure, he will not even succeed in that latter objective, for the simple reason that the increase in unemployment and the loss of tax revenue will mean that he overshoots his public expenditure and public borrowing targets anyway? He will have failed on all fronts.

Mr. Collins: My hon. Friend puts that point extremely well, as I would expect of him. The minimum wage is a

naturally self-defeating system. It has an inbuilt vicious circle, and can act only to increase poverty and reduce job prospects. That is why new clause 14 is so important.
The Chancellor of the Exchequer should be required in the Budget statement to link the implications and impact of the national minimum wage to what the Government have said is at the centre of their economic strategy: the welfare-into-work idea. The minimum wage is a work-into-welfare engine, in some circumstances making it a criminal offence for an employer to give someone a job. That is a quite extraordinary proposition to be made by a Government who are committed to shifting people from welfare into work.

Mr. Ian Bruce: I am following, I hope, my hon. Friend's argument very closely. It seems that the Government are saying that they have a wonderful strategy, and will get people back into work if they can only implement those economic drivers, whereas the Bill's financial memorandum states that they really do not have a clue about the Bill's effects. Even if Ministers knew what the minimum wage rate will be, they do not know how it will affect the economy. Are the Government resisting new clause 14 because they do not have a clue about its consequences, or because, if it were included in the Bill, the truth will be out, especially among Labour Back Benchers?

Mr. Collins: My hon. Friend has put his finger on another interesting argument in favour of new clause 14. The Government's resistance to new clause 14, which we anticipate, may be based precisely on the new clause's annual requirement for clarification.
Many of our debates, yesterday and today, on the Bill have been based on the assumption that the Government are being opaque on the minimum wage only temporarily, and that, at some point in the future, they will clarify their views on it. At some point, they will have to set its introductory level. However, in successive months—as the debate continues on setting and uprating its level for the following 12-month period—Ministers may demonstrate a similar opacity and lack of clarity.
Perhaps Ministers resist the idea of an annual requirement to report on the minimum wage's impact and implications because that would require them to make up their minds at least once a year, whereas Ministers may well wish to keep Labour Back Benchers, public service unions and many other affected groups in darkness about the Government's intentions for as long as possible.
One might advance a deeply cynical thought—even at this late hour73x2014;by saying that the Government might wish to leave the minimum wage at a relatively low level for most of this Parliament, thereby assuring their friends in the Confederation of British Industry that they really are a new Labour Government, but then—perhaps shortly before the next general election—dramatically announce that new statistics have come to their attention that lead them to uprate the national minimum wage.
The hoped-for consequence would be that the Government would attract the votes of low-paid workers, not realising that many of those low-paid workers would lose their jobs if that policy were implemented. Nevertheless, by announcing such a policy a few weeks


or months before a general election, they would hope to get the kudos for it, without having to suffer its economic consequences.

Mr. Leigh: Is not my hon. Friend doing an injustice to the Government? Surely new clause 14 is so obviously right that the Government will be bound to accept it. Although he is a young man, he will recall that the fate of previous Governments—such as the Heath and Wilson Governments—turned almost entirely on wages, and inflation on those wages. Wage levels obviously have a huge impact on the economy, as will the national minimum wage. It is therefore so obvious that the Government will have annually to review the minimum wage that they must accept the new clause, must they not?

Mr. Collins: I am most grateful to my hon. Friend. He may be right that I am being unfair to the Government—as I know that he never is. I try not to be unfair to them, and I shall take on board his admonition.
In raising the spectre of the Wilson Governments, my hon. Friend the Member for Gainsborough (Mr. Leigh) reminds me of an important point that is relevant to new clause 14. Although we have heard a great deal about the commitment to the minimum wage of the so-called modern, pro-business new Labour party, what did the old Labour party of Mr. Harold Wilson think of it when it was in charge of producing Budgets and Budget reports such as that described in new clause 14? It produced a White Paper—30 years ago, when Mrs. Barbara Castle was Secretary of State—that specifically ruled out a minimum wage, on the ground that it would have damaging consequences for employment and for the public finances. That might be another reason why Labour Members are a little reluctant to accept new clause 14. It would require them to examine the issue again and again.
The document to which I have referred was published back in 1967. Then, as now, the Labour party described itself as the natural party of government. Perhaps, once it had been in office for three years, it might find a rather large amount of information that would cause it to reassess its views. Its members are not in favour of new clause 14, because they fear that, the more facts they have, the more they will get in the way of their argument. They do not like facts getting in the way of their argument: they would much rather operate on the basis of prejudice, dogma and all the other elements that we have observed in the debate so far.
New clause 14 has so many advantages that, like my hon. Friend, I am surprised that the Government have not already indicated their willingness to accept it. Let us assume for a moment, however, that they will continue to oppose it.
We must consider what message the Government will send to public service unions that might have an interest, each year, in knowing the exact impact of the minimum wage on the public sector pay bill. What message are they sending to their great friend Mr. Rodney Bickerstaffe of Unison? Mr. Rodney Bickerstaffe of Unison is known for having forthright views about what the level of the minimum wage should be, and what it should be for his employees.

We all know that what it would be for his employees would have a direct and important effect on the levels of public spending, and on the implications for the Budget assessment that the Chancellor would have to make each year.

Mr. Ian Bruce: My hon. Friend mentioned Mr. Rodney Bickerstaffe. I know that we are not allowed to refer to anyone who is in one of the Galleries, but my hon. Friend may have observed, as I did, that the spirit of Rodney Bickerstaffe was with us today. He was so disappointed by what he heard from Ministers that he left, because he knew that nothing would come from them.

Mr. Collins: I was not aware of that spiritual presence. Perhaps there will be further hauntings in times to come.
There may be another reason for the Government's resistance to new clause 14. We know that diplomatic relations between the Government and Mr. Rodney Bickerstaffe are in a slightly tricky state at the moment. Mr. Rodney Bickerstaffe, as leader of the largest trade union in the country, has warned against membership of the European single currency, and has pointed out that it would be damaging for his members.
We can imagine that the Treasury might resist new clause 14 on the basis that, at present, it does not want to do any favours to Mr. Rodney Bickerstaffe, who has dared to speak what is the unspoken and the unspeakable under the current Government, by pointing out that inclusion in a European single currency in the foreseeable future would be demonstrably against the interests of a large number of British people—not least the low-paid people represented by Mr. Bickerstaffe and his trade union.

Mr. Bercow: May I put an alternative proposition to my hon. Friend? May I suggest that, by rejecting our proposal, the Government will gladden the hearts of Mr. Rodney Bickerstaffe and others? If they are not prepared to provide an assessment of the impact of the national minimum wage on the totality of the economy, the incentive for Bickerstaffe and others of his ilk to seek continually to bid up wages in an irresponsible fashion will be that much greater than it would have been if such a discipline had been included in the Bill.

Mr. Collins: My hon. Friend directs my attention to an important factor—although, as he and I may share a platform with Mr. Bickerstaffe before too long, perhaps we should not refer to "others of his ilk" in quite the way my hon. Friend did.
The important point raised by my hon. Friend enables me to turn to the next part of my argument in support of new clause 14. I refer to the impact on the national health service. In requiring the Chancellor of the Exchequer to report to the House each year on the impact on public service expenditure of the national minimum wage, the new clause would enable us, in our Budget debate, to give proper consideration to the impact on the NHS.
We hear a great deal from Ministers—and, indeed, from the Prime Minister, on the odd occasion when he favours the House with his presence—about the figure


of £1.5 billion, which is the additional amount that the Government have supposedly put into the health service. We all know that that is a phoney figure, but none the less we know that, whatever the figure is—as my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) said—it will be appreciably eaten up by the introduction of a minimum wage, and could be increasingly eaten up if that minimum wage is steadily increased year in, year out.
What will be the implications for people in charge of NHS trusts who have had to cope with various changes in the way in which health service pay settlements have been reached in recent years? They have struggled with issues such as whether there should be local or national pay bargaining, and are trying to keep their budgets afloat.
Trusts throughout the country have received considerable publicity about whether they can balance their budgets. Under the provisions of new clause 14, they would be looking for guidance from the Chancellor of the Exchequer on a national pay strategy and the Government's central view on public sector pay. Without new clause 14, they may find themselves bereft of that guidance and negotiating with their staff with no clear guidance on how the Government view the implications of the minimum wage for their pay policy, if they have one, or the implications for overall public expenditure.
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As we heard earlier, apart from the odd mention that he does not want above-inflation increases in public expenditure in any year from here to eternity, the only message from the Chancellor is an electioneering one—he would rather like to be Prime Minister. He has even dropped the part about the Prime Minister being president. That is not an argument for opposing new clause 14.
As the debate has continued, the Government have been extraordinarily reluctant to accept even the most modest amendments—including those that would give them more power than they had under the Bill and new clause 14, which would merely require them to report to the House, in which they currently have a huge parliamentary majority. Why are they afraid of reporting the implications of their policy to a parliamentary assembly that they control? Could it possibly be that, if new clause 14 were in place, they would be somewhat afraid of the reaction of their own parliamentary party to the full implications of the minimum wage and its knock-on implications for sacking people in the health service?
New clause 14 would require the Government to do no more than assess the implications of a policy that they tell us is flawless. If they are right about the absence of any imperfections in their policy, they should welcome the chance at least once a year to report to the House on its implications. If they do not, we must assume that, slowly but surely, they are beginning to think that perhaps Barbara Castle was right, and that a Labour Government should not support such legislation.

Mr. Keith Simpson: I am grateful to be called to speak on new clause 14, which I regard as absolutely crucial to the Bill. At the start of his speech, my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) referred to the importance of the Chancellor of the Exchequer. As I speak in the wee small hours of the morning, making certain that the national minimum wage will not go quietly into the night, we should consider that the Chancellor of the Exchequer will not be in bed. He will be working hard on all aspects of Government policy.
I am a little concerned about the phraseology of the new clause, which the Minister might consider amending slightly, if it is acceptable to her. It refers to
The Chancellor of the Exchequer, acting in consultation with the Secretary of State".
The phrase "acting in consultation" is far too woolly. It does not define properly the responsibilities involved or the issue of leadership between the Chancellor of the Exchequer and the Secretary of State. I would prefer a phrase such as "The Chancellor of the Exchequer shall desire, request and direct the Secretary of State". My hon. Friend the Member for Westmorland and Lonsdale made it quite clear that the Treasury was the central Department in Whitehall. Indeed, the Chancellor of the Exchequer undoubtedly regards himself as the first Minister of State under the president—or rather, the Prime Minister. I should like that point firmed up.

Mr. Ian Bruce: My hon. Friend is understating the relative importance of Ministers in this Government. The importance of Ministers must relate to some extent to the amount of money spent on refurbishing their flats. As we all know—

Mr. Deputy Speaker (Mr. Michael Lord): Order.

Mr. Simpson: I take on board my hon. Friend's comment. We must ensure that the Chancellor, who is the senior member of the Cabinet apart from the Prime Minister, can extract the relevant information from the Department of Trade and Industry. Many hon. Members present have considerable experience of working in the Government. They know only too well that, time and again, Departments do not hand over the relevant information.
My second point concerns which Treasury Minister should be responsible for working with the Department of Trade and Industry to obtain the necessary information about the national minimum wage. I assume that the Chancellor of the Exchequer, who works 24 hours a day, would not want to do that. I am not even certain that it would be the responsibility of the Chief Secretary. Either the Minister of State or the Paymaster General, who have considerable experience in business worldwide, might look after the issue. However, my preference is for the Financial Secretary to the Treasury. She has a proven track record and could gain the information required for an assessment of the national minimum wage.

Mr. Hammond: Has it occurred to my hon. Friend that there is a Minister who serves in both the Department of Trade and Industry and the Treasury who could provide an apposite conduit for such a conversation between the


two Departments—the Minister for Trade and Competitiveness in Europe? As the impact of the minimum wage on our public sector finances will directly affect our competitiveness in Europe, might it not be for him to effect such liaison between Departments?

Mr. Simpson: My hon. Friend has opened up a fascinating area of debate. With deference to you, Mr. Deputy Speaker, I do not want to be drawn into it. I am almost overwhelmed by the possibilities. Perhaps it is a task for the Minister without Portfolio. If ever there was a misnamed Minister, it is the Minister without Portfolio. He seems to have too many portfolios.

Mr. Bercow: I have no desire to tempt my hon. Friend to misbehave at 2.21 in the morning. He is asking important questions. about which Minister should take responsibility for the report. Does my hon. Friend think that the Financial Secretary to the Treasury might be the most appropriate person, because of the immense experience, financial acumen and taxation expertise that she brings to bear in the performance of her duties—a fact on which I am sure that most hon. Members have remarked at some time?

Mr. Simpson: I have already said that the hon. Lady is my preference for the job. I know that some of my hon. Friends want to speak in the debate so I shall try to keep my comments to under an hour. We need to establish that the issue will be an important Treasury responsibility. The Chancellor will have general oversight, but my preference would be for the Financial Secretary to be given the task. It is not enough for the Treasury to act in consultation. The Secretary of State should be desired, requested and directed to provide the information.
Another point that perturbs me on the new clause—I am sure that the Minister will be able to reply to this—is the administrative and bureaucratic nature of acquiring such information. Conservative Members believe in minimal government; we do not believe in creating ever more government. Unless we are careful, we may open up a job creation scheme in the Department of Trade and Industry, with ever more civil servants collating the information.
As my hon. Friend the Member for Westmorland and Lonsdale made clear, it is crucial that an assessment of the cost of the national minimum wage is provided so that ordinary members of the public—let alone Members of Parliament—can see, year in, year out, the consequences of it.
The new clause does not go far enough. Many of us think that there should be not only an assessment of the cost of the national minimum wage to the Government in respect of employment costs in the public sector, but an assessment in respect of employment costs in the private sector. The Bill will bear down on many of our constituents.
The new clause is admirable; I really hope that the Government accept it. My own preference would be a much more direct requirement on the Secretary of State to provide information. I would also like an assessment of the impact on employment costs in the private as well as the public sector. The new clause is crucial, and I hope that the Minister will accept it in the spirit in which it is offered.

Mrs. Eleanor Laing: This new clause must surely be one of the most reasonable to be tabled in debates on this or any other Bill recently discussed. It does not even ask the Government to do anything that they are not otherwise proposing to do. All that it does is impose on the Government a duty to tell Parliament the result of their policy and how it is affecting the public sector. It is perfectly reasonable to ask the Government to do that, and hard to imagine what possible objection they could have to carrying out such a simple duty.
What has happened to open government? Have not we heard in recent weeks and months that the new Labour Government are an open Government, a people's Government, an accountable Government? However, as soon as they are asked to do something in the spirit of open government—simply to provide information—they refuse to do so. It is hard to understand why.
Let us examine the effect of the new clause. The one thing in it to which I take exception is the phrase
the cost of the national minimum wage to Her Majesty's Government".
We all know that Her Majesty's Government do not bear the cost of anything. The taxpayer bears the cost. The taxpayer pays income tax, council tax and all the other taxes which the Government are trying to hide. The people are starting to have to pay such taxes because they voted for a new Labour Government.

Mr. Keith Simpson: And an offshore tax.

Mrs. Laing: Indeed—even more so in the past week.
I am concerned most with those who pay income tax and council tax. It is clear that the Government's objection to the new clause must be on the ground that they want to give the impression that no one has to pay for the minimum wage and that the policy is one of motherhood and apple pie—one that can be only good and not bad, and can bring only benefits and no disbenefits. [HoN. MEMBERS: "Hear, hear."' That is simply not true.

Mr. Bercow: My hon. Friend is making an extremely powerful speech. Does she agree that the way in which Labour Members cheered with enthusiasm when she made that last point is proof, if there was any consistency in what passes for their brains, that they ought to be prepared to countenance—indeed, advocate—the publication of an assessment? If the effect of the Bill will be all benefit and no cost, of what exactly, in a published assessment, are they afraid?

Mrs. Laing: I could not agree more with my hon. Friend. As usual, he is absolutely right. What is it that the Government want to hide?

Mr. Jim Murphy: Answer the question.

Mrs. Laing: Labour Members are only too happy to make a lot of noise from a sedentary position, but for the past hour or two, it has been noticeable that no Labour Back Bencher has got up to speak on this matter. Is that because they do not care? They are certainly not asleep at 2.29 in the morning. Why are they sitting here, saying nothing? They are making a lot of noise, but no one wants to intervene to answer my questions.
2.30 am
It would not be in order, would it, Mr. Deputy Speaker, for me to answer questions asked from a sedentary position? I assume, therefore, that Labour Members are afraid of new clause 14. [Interruption.] There is more noise from Labour Members. I can only assume that, as my hon. Friend the Member for Buckingham (Mr. Bercow) said, they are afraid of the information that would be published and set before the House if the new clause was accepted.
Labour Members are afraid because, as I was saying before my hon. Friend the Member for Buckingham wisely made a different point, they want the people to believe that the minimum wage is a policy for which no one must pay or that, if anyone must pay, it is the fat cats, as the Minister of State said earlier.
The Government want the people to believe that the fat cats are the only people in the United Kingdom who will ever have to pay for anything. There will be precious few fat cats left when the Government have imposed all their hidden taxes on everyone and anyone they can think of.

Mr. Keith Simpson: There will be some offshore fat cats left.

Mrs. Laing: As my hon. Friend says, there will be some offshore fat cats left.

Mr. Collins: Does my hon. Friend consider that there is significance in the fact that, in recent months, the fat cat of fat cats, Mr. Ecclestone, was welcomed at 10 Downing street, whereas Humphrey was too thin a cat to stay?

Mrs. Laing: Indeed. My hon. Friend tugs at the heartstrings with the thought of poor Humphrey, that most lovable of unfat cats of the—

Mr. Deputy Speaker: Order. I should be grateful if the hon. Lady would return to the new clause.

Mrs. Laing: I beg your pardon, Mr. Deputy Speaker. I will return immediately to the new clause.
I am anxious about the effect that the Bill will have on my constituents who, in their capacity as council tax payers, already face a huge increase, compared with recent years, in the council tax burden that they will have to bear. A very large amount of that council tax will help to pay public sector pay bills.

Mr. Swayne: I have been unable to get especially excited about new clause 14, but I wonder whether my hon. Friend would help me. Will she explain how the acceptance of new clause 14 will reduce her constituents' council tax bills?

Mrs. Laing: I appreciate my hon. Friend's question. The new clause would not reduce council tax bills, but it would explain to council tax payers why their council tax has risen so much as a direct result of the decisions of the new Government, who said that they would not impose new taxes. We have yet more hidden taxes, as I am sure my hon. Friend the Member for New Forest, West (Mr. Swayne) would agree.
If the Bill is not to raise council and income taxes even further to meet the public sector wage bill, the books will have to be balanced by cuts in the public sector bill. My constituents do not want less money to be spent on schools—[Interruption.] I do not understand why Labour Members find that amusing. My constituents do not want less money to be spent on schools and hospitals.
This morning, I visited a hospital just outside my constituency, which is used by my constituents, to witness the Secretary of State for Health opening a special care baby unit funded by charitable donations. People are concerned to put money into hospital care, not to see money taken out of it.
The Government are afraid that, if the new clause becomes part of the Bill, they will have to come clean with the people of Britain and tell them where their money, as taxpayers and council tax payers, is going. That is why Labour Members do not even want to participate in the debate on the new clause, which is disgraceful.

Mr. Hammond: I cannot and will not attempt to match the eloquence of my hon. Friend the Member for Epping Forest (Mrs. Laing). I have one or two more prosaic points to make. The proposal in new clause 14 is important and as the debate has progressed I have become more convinced that it should stand part of the Bill.
Essentially, we should be looking at the effect of the national minimum wage on public sector employment costs. There is a considerable body of relatively low-paid employees in that sector and there is no need for this legislation for that problem—if it is perceived as such—as they are Government employees in one or other of the Government's manifestations. If the Government were so concerned about the problem of low pay and low-paid jobs, they could have made a start on 2 May 1997 by tackling the problem directly, without legislation, in those areas for which they, as the employer or ultimate paymaster, have direct responsibility.
I am moved to wonder whether the Government, despite their rhetoric about the wholly beneficial effects of the Bill, already understand the serious implications for the public finances, which have not been quantified meaningfully in the annexes to their submission to the Low Pay Commission. As my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) said, there has been no attempt to measure the impact of the restoration of differentials in presenting the expected cost to the public purse of the national minimum wage.

Mr. Ian Bruce: I wonder whether the spirit of new clause 14 would be met if the Government and the Chancellor stated how they deal with the low-paid—in other words, if they made a sweep of the public sector, through local councils and all the people who work for them through contractors, and worked out how much they would have to pay and put the money aside, which would prevent the need for additional money through the minimum wage.

Mr. Hammond: I thank my hon. Friend for that point. The important issue is that, without knowing the extent to which differential restoration will occur, it is difficult for the Government or anyone else accurately to predict the cost of the national minimum wage to the public purse or to any individual or company in the private sector.


That is why it is so important to have a mechanism for reviewing the national minimum wage and putting it into focus after the event.

Mr. Bercow: Is my hon. Friend aware that, on page 21 of the Government's submission to the Low Pay Commission, it is stated that the national minimum wage
may increase pressures on the public sector pay bill in some departments"?
Does he agree that the use of the word "may" in that context is patently absurd? It is only a matter of time before the Government finally use the more accurate word "will".

Mr. Hammond: I thank my hon. Friend for his intervention. I suspect that the Government, if challenged on that point, would retreat behind their customary mask of saying that the Low Pay Commission has not yet recommended a rate and that it is impossible—as, indeed, it is—to estimate the impact of the national minimum wage on the public or private sector without knowing the rate at which it will be set.
I come back to the absence of any estimates of the impact of differential restoration in the Government's evidence to the Low Pay Commission. I submit that the public sector has a relatively rigid pay structure, which is perhaps unsurprising given the development over many years of a remuneration structure that is less flexible than is nowadays generally to be found in private sector companies—it is perhaps more akin to the structures that would have obtained in large private sector companies 20 or 30 years ago. That is not a criticism; it is perhaps inevitable that the extra requirements for accountability in the public sector will encourage more rigid and bureaucratic structures than can develop in private sector organisations.
Does the Minister think that the impact of differential restoration in the public sector may be more serious than in the economy as a whole? In other words, will there not be a disproportionately adverse effect on public sector finances, because of more rigidly locked rates of pay? Is it not also the case that at, or just above, the level at which the national minimum wage is widely expected to be introduced, there is a large cluster of pay rates in important public sector organisations, such as the national health service? That means that the impact of a national minimum wage that is set at a level just below the wages that a large number of employees earn will have a marked upward effect in terms of differential restoration.

Mr. Boswell: Does my hon. Friend agree that, in the public sector alone, setting the rate at £4 rather than £3.75, which seems innocuous, would in fact double the cost to the taxpayer?

Mr. Hammond: As I said, I think that it is difficult for anyone to estimate with any certainty the cost of any pay rate, because of the imponderable of differential restoration, although I am quite prepared to follow my hon. Friend's guidance that the cost would be of that order. The issue will be critical to the public sector.
The fact that the Chancellor of the Exchequer is reported to be considering long-term settlements below the level of inflation for spending Departments puts the matter into a particular context.
The minimum wage will increase cost pressures on spending Departments in a climate in which public spending—if the Chancellor's spin is borne out—is likely to be seriously constrained. I wonder whether the suggested report might give a breakdown of the cost of the minimum wage by Department, as the impact will not be uniform across Departments.
Some Departments have a higher proportion of labour costs in their total expenditure, and some have a far larger clustering of lower-paid workers who are more likely to be affected by the minimum wage.

Mr. Lansley: My hon. Friend will forgive me if I am unduly cynical, but would not it be an advantage if the report were to treat not April 1999 but April 1998 as its starting point? Otherwise, we may mysteriously find that Departments of their own volition settle pay at —3.60 an hour or above and subsequently say that they were planning to pay those rates through collective bargaining, regardless of the minimum wage.

Mr. Hammond: Indeed. How does one establish the base line against which to measure the cost?

Mr. Ian Bruce: I am a bit worried that my hon. Friend, in listening to the spin in the press, has missed the statements constantly made by the Minister of State, who tonight asked whether £1, £1.20, £1.40 or £1.60 an hour was too low, but did not mention the £1.80 at which minimum rates start in the agriculture sector. [Interruption.] The Minister of State's resistance to the new clause may stem from the fact that Ministers have decided to go that low and to abandon any idea of increasing minimum rates in the public sector.

Mr. Hammond: That is an interesting idea, but I listened to the Minister of State intently in Committee and I do not expect him to feel comfortable with any such low rates. [Interruption.] I accept that the decision will not ultimately be his, and that he may be leant on from much higher places—Hartlepool, perhaps.

Mr. Bercow: I suggest that my hon. Friend, although not a member of the Treasury team, might be a suitable future author of the assessment of the impact of the national minimum wage, not only because of his exceptional economic expertise, but because at 2.48 am he still looks extremely relaxed and refreshed. Nobody could accuse him of being tired and emotional, as other hon. Members clearly are.

Mr. Hammond: I assure my hon. Friend that I have had no dutiable refreshment.
The central point of the new clause concerns the impact that the national minimum wage will have on different Government Departments and the crucial question for the British people of whether those Departments will be compensated for the cost of meeting the national minimum wage. People are right to be concerned about that and their concern has been emphasised by the recent leaks that have suggested that, in the longer term, we face a public spending regime that envisages increases at or below the level of inflation. That would imply significant real cuts in spending for Departments such as the


Department of Health, a significant part of whose budget is swallowed up by labour costs, including those of many lower-paid workers who will be caught by the Bill.
It is important that we remember that the Bill will not only affect those who are paid at a low rate. It may affect professional people, working in the health service or the education system, who work long hours for a salary that appears to be above any level for the national minimum wage. Because the national minimum wage will be defined in terms of earnings per hour, it is possible that people earning middle-ranking salaries could be caught by the Bill. That is not necessarily a bad thing, if those people are working very long hours.

Mr. Swayne: Is that not precisely why the Government exempted the armed forces from the Bill?

Mr. Hammond: My hon. Friend is right. We put that argument in Committee and the Government were minded to accept it. The Minister has repeatedly made the point that he accepted the exclusion of the armed forces because they have a pay review body. Is he thinking of excluding nurses and teachers because they have pay review bodies? I suspect not, but that would be one way to deal with the impact of the Bill on public sector finances.

Mrs. May: I am pleased to see that the Minister of State has returned to his place for part of this debate. From his comments on earlier new clauses, it was clear that the Government see the national minimum wage as a dogmatic policy that they will introduce regardless of the implications. New clause 14 is relevant to that point because it would ensure that the Government set out—not just to the House but to the public—the implications of a national minimum wage for public sector expenditure.
The paucity of figures for and proper analysis of the impact of the national minimum wage is telling. Whenever the subject has been raised in questions to Ministers, they have fallen back on the existence of the Low Pay Commission and the fact that they do not know the level of the national minimum wage. A Government determined to introduce a national minimum wage should have considered the cost implications for the economy, especially for public sector expenditure, for a selection of benchmark figures. We have no evidence to suggest that the Government have done that. They do not seem to care about the implications of their policy, because they will implement it as a point of dogma.

Mr. Letwin: Will my hon. Friend accept that the situation may be even worse than she describes? Page 23 of the Government's submission to the Low Pay Commission gives the estimates to which my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) referred and it states that the effect of the minimum wage would be greater if the differentials were restored above the minimum. However, it gives no estimate of the cost. Does not that suggest that the Treasury has concealed estimates that it must have calculated?

Mrs. May: I am grateful to my hon. Friend for pointing that out. That was a key point of the argument advanced by my hon. Friend the Member for Runnymede and

Weybridge (Mr. Hammond). Differentials are crucial to the minimum wage's impact. The Government have failed to address that and constantly try to walk away from it. The Treasury has not been willing to estimate the impact of differentials, presumably because it is concerned about the effect on public sector expenditure and recognises that the figures would not be palatable to the House or the public if they were made generally available. That was also clear from the Government's evidence to the Low Pay Commission.
Several hon. Members spoke about the impact of the national minimum wage on the national health service but another aspect is mentioned in the Government's evidence: their policy for welfare reform. The evidence states:
The potential impact of a National Minimum Wage on Social Security finances could in this context be very important.
That was mentioned in passing by my hon. Friend the Member for Daventry (Mr. Boswell), who talked about the cost of residential care.
I refer hon. Members to the front page of the March edition of Disability Now, which has an article headed:
Minimum wage will hit us hard, warn homes".
It states:
The national minimum wage could lead to job losses in care homes and day centres, the National Council for Voluntary Organisations (NCVO) has warned.
Voluntary groups gave evidence to the Low Pay Commission in January which highlighted the problems facing funders and providers of community care… A rate above £3.40 an hour could impact on disabled people in residential accommodation and those employing carers in their own homes".
I want to concentrate on that latter point.
New clause 14 is excellent because it requires the Government to identify the public expenditure cost in respect of public sector employment costs, but there are hidden knock-on effects that should be brought to general attention. I want to focus on the knock-on effect on disabled people who employ carers by using their disability living allowance to improve their quality of life through, for example, being able to get up and go out to work in the mornings. People are concerned about what will happen because of the comprehensive spending review, welfare reform and the operation of the benefit integrity project. Disabled people are worried about the future of their benefits because the Government refuse to guarantee that there will not be significant cuts.

Mr. Deputy Speaker: Order. The hon. Lady is straying rather far. Would she please return to new clause 14?

Mrs. May: I was just about to. The cost of employing a carer could affect the quality of life of people with disabilities. It is such figures that need to be identified by the Government in considering the implications of introducing the national minimum wage. That is why new clause 14 is so important. It will require the Government to produce proper estimates of the implications of introducing a national minimum wage and set out clearly the implications for public sector expenditure.
While new clause 14 is general, the Government should produce figures that differentiate between Departments, explain the impact of reinstating differentials and identify the knock-on effects, especially in respect of social security and benefits, on the cost of employing people in


the public sector to help people with disabilities. We have not had enough information from the Government. It is essential that they own up to the implications of their policies and make them clear to the House and to the general public.

Mr. Syms: I have waited since 3.30 pm yesterday to make my speech on new clause 14, because it is important. The Government have been honest and honourable in their proposals for a minimum wage. They have made it perfectly clear that that is what they want, but I want them to be honest and honourable about its cost to the public sector.
New clause 14 would make a substantial contribution to the debate. When the rate is set, whatever it may be, I am perfectly sure that many will say it is too low and that many others will say it is too high and cannot be afforded. That debate, which will continue over the next few years—certainly beyond the next general election—ought to be informed by figures produced by the Treasury. If the Treasury does not produce figures, others have a tendency to make them up. The proposal in new clause 14 to set out the cost to the public sector in the "Financial Statement and Budget Report" will lead to a better and more informed debate on this subject, which is important to many families throughout the country.
3 am
The key point is that the minimum wage should be seen not on its own, but within the totality of the economic management of the nation. It is appropriate that the measure should be taken on Budget day and seen in the context of what the nation can afford in relation to all sorts of other areas. It is also important that, when the Government make submissions to the Low Pay Commission, the cost to the public sector is seen explicitly in the FSBR so that we know what information is being given.
I do not wish to detain the House by going on too much longer, because I know that many of us are anxious for the Adjournment debate—[Laughter] We are trying to make progress as rapidly as possible and, had the Bill been better drafted, our progress might have been more rapid.

Mr. Lansley: My hon. Friend said rightly that it is important to set the cost of the minimum wage to the public sector in employment terms in the context of the FSBR. In that respect, does he share my concern that one of the implications of the national minimum wage reflected in the next FSBR may be that, in order to offset the impact on employers' costs, the Chancellor may seek to reduce national insurance contributions by the lower-paid and to compensate for that by increasing national insurance contributions by higher-paid employees? That would directly put—

Mr. Deputy Speaker: Order. That is far too long for an intervention.

Mr. Syms: My hon. Friend has made a good point, which reinforces the need for new clause 14.

Gillian Merron: On a point of order, Mr. Deputy Speaker. I read in the Register of Members'

Interests that the hon. Member for Poole (Mr. Syms) has a number of family businesses, remunerated directorships and registrable shareholdings. Are those interests that he should have declared, given that they may influence his contribution to the debate?

Mr. Deputy Speaker: That is a matter for the hon. Member concerned, not me.

Mr. Syms: My interests are all fully declared, which is why the hon. Lady can read them. This is my first contribution to the debate.
New clause 14 would ensure that the Government made a full statement in the FSBR of the cost to the public sector. That is a clear and sensible proposal. I hope that the Government will take it on board, because that would be a sensible way of ensuring informed and transparent debate in future.

Gillian Merron: Further to my point of order, Mr. Deputy Speaker. I appreciate your point that declarations of interest are not a matter for you, but the hon. Member for Poole has not yet declared his interests and I feel it appropriate to the debate that he should do so. Given his directorships and shareholdings and his status as an employer, it is clear to me that he will have a view on how much he pays in wages—

Mr. Deputy Speaker: Order. I have already dealt with that point. Hon. Members are well aware of the rules of the House: it is for them to declare any interests that may be relevant to the debate.

Mr. Syms: I am glad that the hon. Member for Lincoln (Gillian Merron) takes an interest in my affairs.

Mr. Hammond: The new clause relates to the public finances. Like me, my hon. Friend is a taxpayer, so perhaps we should both declare an interest.

Mr. Syms: My hon. Friend makes a good point.
New clause 14 is an important proposal that would allow a more informed debate. I commend it to the House.

Mrs. Roche: We have had a fascinating hour and a half. I listened with great attention to the speeches made by Conservative Members, but it was difficult to establish what they had to do with the new clause.
As hon. Members will know, the "Financial Statement and Budget Report", as its name suggests, is primarily concerned with measures announced in the Budget. The minimum wage is not a Budget measure. The appropriate place to cover the potential costs to the Exchequer of non-Budget measures is the financial memorandum that accompanies the Bill. That is what we have done. We have also covered similar ground in the regulatory appraisal that we published with the Bill, as is quite proper.

Mr. Hammond: Will the hon. Lady give way?

Mrs. Roche: No. The hon. Gentleman knows from debates on the Floor of the House and from our detailed discussions in Committee that I give way extensively, but we have discussed the new clause for an hour and a half,


and while it has amused Conservative Members, it has added nothing to the debate. It would not be right to detain the House any further.
The financial memorandum makes clear that Parliament will be given further details of the effects on the public sector when the relevant regulations are introduced in the light of the Low Pay Commission's recommendations. One of the matters that the commission has been asked to consider when formulating its recommendations is the cost to the Exchequer. That may include any impact on employment costs in the public sector. The commission is due to make its recommendations by the end of May, and the Government will respond shortly after.
Any employment costs of the minimum wage to the public sector will vary across different parts of the sector and will depend on the level at which it is set. A regular assessment as required by new clause 14 would not make sense, because such costs would be identifiable only at the introduction of or following an uprating of the national minimum wage. It would be inappropriate and unnecessary to include such costings in this or future FSBRs. If the new clause is pressed to a Division, I ask the House to oppose it.

Question put and negatived.

Clause 2

DETERMINATION OF HOURLY RATE OF REMUNERATION

Mr. Lansley: I beg to move amendment No. 43, in page 2, line 22, at end insert—
'except that payment by an employer of pension contributions to a recognised pension fund on behalf of an employee shall be treated as part of a person's remuneration for the purposes of this Act.'.

Mr. Deputy Speaker: With this, it will be convenient to discuss amendment No. 44, in page 2, line 22, at end insert—
'except that expenditure made by a employer in respect of training that is wholly or partly attributable to a person shall not be treated as part of that person's remuneration for the purposes of this Act.'.

Mr. Lansley: As hon. Members will be aware from their close scrutiny of the Bill, clause 2 enables the Secretary of State to make regulations governing matters that will include, under subsection (4), provision with respect to what is to be treated as remuneration for the purposes of the national minimum wage.
In Committee, we several times tested the Government's intention on what would constitute remuneration for these purposes, and found a surprising lack of specificity. The furthest that Ministers would go was to offer us what was described as an illustrative list of the components of remuneration, which would no more than explain to a good human resources manager what would constitute a list of pay and benefits. One or two specific issues were not covered in detail by amendments, and the debate and subsequent consideration clearly show the desirability, on grounds that I hope to explain, of putting in the Bill the specific treatment of two aspects of remuneration.
I shall speak briefly to each of the amendments, because, although they are rightly linked because they relate to the same clause, they are different in their treatment of specific aspects of remuneration. [Interruption.]

Mr. Keith Simpson: On a point of order, Mr. Deputy Speaker. Is it in order for hon. Members who are going to or coming from bed to make such a noise while my hon. Friend is speaking?

Mr. Deputy Speaker: Such matters are entirely for the Chair.

Mr. Lansley: As I was saying, I hope to speak to each of the amendments. They deal with discrete subjects, but both relate to the same clause and specify direct treatments for aspects of remuneration.
Amendment No. 43 relates to pensions. Hon. Members will observe that it seeks to provide that, when an employer makes pension contributions on behalf of an employee into a recognised pension fund, they should be included in that person's remuneration for the purposes of the legislation.
It may be for the benefit of the House to reflect on some of the considerations in the Confederation of British Industry's evidence to the Low Pay Commission. The CBI rightly pointed to the importance of pension contributions as an aspect of remuneration.
The CBI says, for example, that pension contributions are often worth more than 10 per cent. of pay, and that both employers and, indeed, the Government regard such contributions by employers as playing an important part in the establishment in the longer term of a United Kingdom pensions framework and self-sufficiency in pensions.
I know that you, Mr. Deputy Speaker, would not expect me to comment at length on the desirability of self-provision through occupational pension schemes. For the purposes of this debate, it would be reasonable to treat that as self-evident and as a point that is agreed by hon. Members on both sides of the House. The intention of policy should be to maximise the extent to which employees undertake pension contributions that are designed to secure an adequate income in retirement, so that they do not fall back on the Exchequer or the benefit system for a reasonable income after retirement. [Interruption.]

Mr. Deputy Speaker: Order. Many private conversations are going on in the Chamber. Would hon. Members please listen to the hon. Member for South Cambridgeshire (Mr. Lansley)?

Mr. Lansley: Thank you, Mr. Deputy Speaker. I was comforted by the fact that, at that moment, at least the Minister of State was listening to me, even if other Labour Members were not. I recognise that, if it matters, the Minister should hear me, rather than other Members, who will do his bidding in this matter.
If we take it as read that the desire of policy is to reinforce rather than to undermine occupational pension provision, what is evident from the CBI evidence—rather than quoting it, I shall render simply my analysis of it—is that there is a significant potential disincentive if pension


contributions are put outside remuneration for the purposes of the national minimum wage and if the wage is set at anything above a relatively low level. Clearly, all those concerns are predicated on a discussion of a particular rate, and the CBI's evidence is predicated on the difficulty that would arise if the rate were set "at a high level", as it expresses it.
If the rate were set high, and if, as a consequence, employers were placed under severe cost pressures and needed to consolidate what would otherwise be benefits in kind outside basic pay into basic pay to comply with the national minimum wage rate, employers would not, to the extent that we would wish, be willing to contribute to occupational pension schemes in addition to paying the basic wage rate.
That presents us with a serious problem. If we do not know at this point whether pension contributions will be included in or excluded from the national minimum wage, we cannot assure ourselves as a House as to the overall compliance of that policy with broader policies to secure greater self-sufficiency in occupational pension schemes.

Mr. Ian Bruce: My hon. Friend has an advantage over many of us in the Chamber, in that he sat on the Standing Committee. When it got to the regulations, did the Government give any indication as to exactly what they were going to include? Have we had any draft regulations yet that would help the House?

Mr. Lansley: My hon. Friend illustrates part of the difficulty that lies behind tabling an amendment of this sort. Although the Government illustrated for the benefit of the Committee—indeed, the Minister was kind enough to give us a note—the components of remuneration, and although they presented the same note to the Low Pay Commission, pensions were listed in a paragraph at the end simply as one of the items that might be included as a benefit in kind. I am sure that the Minister would not suggest that, in presenting such a note, he intended to say that all benefits in kind had to be included.
For example, tips were instanced as a component of remuneration, but the Minister has not vouchsafed his view whether gratuities and tips should or should not be included, and the circumstances under which they should or should not be included. Therefore, we know only—my hon. Friend makes a good point—that pension contributions on behalf of an employee form a benefit in kind that may be treated as part of that person's remunerative package.

Mr. Hammond: Watching the Minister's face during my hon. Friend's remarks prompts me to put on the record the fact that, in Committee, the Minister made his personal view on tips very clear. What is not clear is what the Low Pay Commission will recommend.

Mr. Lansley: I defer to my hon. Friend, who in Committee tested the Government and the Minister pretty much to destruction on the subject of tips and gratuities. However, we are not discussing that now.
I want to bring my remarks on amendment No. 43 to a conclusion—[HON. MEMBERS: "Shame."] I am surprised; I had thought that the points I was making were self-evident. For some reason, Labour Members seem to

think that they are not. Perhaps they will rise and explain why they do not think that my points are self-evident—I think they are.
If the desire is to support occupational pension schemes, we must include in the Bill the provision that employers' contributions should be included in remuneration. Only by that route will we avoid the risk that employers will be under a perverse disincentive to cut pension contributions in order to meet their obligations under the national minimum wage.
Amendment No. 44 relates to training, but its intention is not to determine whether there is a national minimum wage training rate. That is something on which we await advice from the Low Pay Commission and regulations from the Government, using the powers in clause 4 to amend clause 3 by regulation.
We want to follow through the question whether there is to be a training rate, and what the implications would be for training costs incurred by employers. Is there to be a training rate? If the answer is yes, that suggests that that rate is lower than the uniform single national minimum wage rate. If, in addition to a lower rate for trainees, training costs incurred by an employer are also taken into account as part of a trainee's remuneration, the net effect overall will be further to depress the rate of pay for that trainee under national minimum wage legislation.
Unless the Minister or Labour Members suggest otherwise, that would appear to go a long way towards providing a specific disincentive to someone to take up a training post, as opposed to one which has no training but which might attract the full hourly rate for the national minimum wage.
If, however, there is not to be a training rate, what will be the consequences? Paragraph 66 of the Government's evidence to the Low Pay Commission—which I recommend to hon. Members who have not had a chance to look at it—states clearly their view that, even if they were able satisfactorily to define trainees for the Bill's purposes, there would be a risk that having a lower training rate would act as a disincentive to people, particularly young people, to enter a training post rather than a non-training post.
If there is no training rate, the logic of the Government's argument flows through into training costs. Likewise, if training costs are fully taken into account in the remuneration payable to a trainee—and we all know that training costs for relatively young and unskilled people who have a skills backlog to make up can be high in proportion to the cost of employment—that will have precisely the same impact, which is to reduce the amount that is available within the headroom of the national minimum wage to be paid as remuneration directly to that employee. That will put us right back to precisely the point that the Government, rightly or wrongly, suggest is the reason why they may not want a separate training rate.
I make the assumption—although I realise that it is not one that the Minister will confirm today—that the Government do not want a training rate. That is why they have gone to the trouble in paragraph 66 to provide so explicit a steer to the Low Pay Commission—that, instead of going to the trouble of trying to define trainees or running the risk of creating a perverse disincentive against establishing training posts, the Low Pay Commission should treat the age criterion as a proxy for training, and apply a lower rate to all those under 26.
If that is the path down which the Low Pay Commission goes, and if the Government accept the commission's advice, including training costs in the national minimum wage will provide the precise disincentive to which the Government object. It would be entirely logical within the structure of the Government's own arguments—as presented to the Low Pay Commission and as will be implemented in the legislation—to exclude training costs attributable to a person from the calculation of a national minimum wage.
If for any reason I am wrong in my assumption—[Horn. MEMBERS: "No."] I hear the sounds of Labour Members, who think that it is extremely unlikely that I am wrong; I am grateful for their support in the matter.

Mr. Ian Bruce: I wonder whether my hon. Friend has thought about—[Interruption.] I can hardly hear myself speak; I hope that my hon. Friend can hear me. A type of remuneration that could well be coming in the near future is an offer by employers to give employees a specific amount to help them pay back the very large student fees that they will have to pay. Many of them may be low-paid trainees who are just on the minimum wage, part of which may consist of training costs. I wonder whether my hon. Friend has put his mind to that specific situation—which could apply also to people attending technical colleges, who may have to pay for part of their course while they are employed?

Mr. Lansley: I am grateful to my hon. Friend. I had not specifically dealt with that point—which reminds me that, with the imposition of tuition fees and the proposed changes to maintenance grants, there has already been a significant reduction in the number of mature students applying to enter higher education. The reductions show, as one would expect, that Conservative Members understand only too well—rather better than Labour Members sometimes do—the incentive and disincentive effects of costs and charges. We may already be seeing the disincentive effects of imposing additional costs in higher education.
In tabling amendment No. 44, I hope to exclude the risk—to which the Government themselves attribute some importance—that those who are contemplating taking up a post with associated significant training costs for their employer will be discouraged from doing so because they will have to live with the consequence of a much lower wage than they would receive if they were to take a different job without training and the long-term benefits of acquiring skills, but which would deliver to them in the short term the single national minimum wage rate.

Mrs. May: Does my hon. Friend agree that it would be entirely consistent with the Government's policy of lifelong learning and expectation that people will continue throughout their lives to train and retrain in different skills if Ministers were to accept his amendment No. 44?

Mr. Lansley: I am grateful to my hon. Friend, and I entirely endorse her point—which I hope will further encourage Ministers to accept amendment No. 44. The amendment is not remotely destructive, as the Minister has suggested—it is designed to be employee-friendly,

and to address the Government's own explicit reservations, as expressed in their evidence to the Low Pay Commission. In a sense, it is designed to reflect not the concerns advanced by Conservative Members—substantially in Committee—but some of those presented to the Committee by the Government, the logic of whose position has not been carried through.
The Government—understandably—have resisted many amendments, saying that they must wait for the outcome of consideration by the Low Pay Commission before making regulations. That is perfectly all right. I am trying to make it clear to Ministers that we do not need to wait for that outcome—that there is a rationale for excluding training costs from remuneration where they are attributable to a person, whether or not there is a training rate in regard to the national minimum wage. The logic applies in both cases, which is unusual.
The argument about pensions is separate. It would greatly enhance the security and comfort of industry if it were made clear now that there is no danger of the broader policy objectives in relation to promoting self-sufficiency in retirement being undermined. I am thinking particularly of low-paid and vulnerable persons who would otherwise be without occupational pension schemes in retirement, and would therefore depend solely on the whim of future Governments regarding the benefits system.
The Government have said that they want to free people from that, through stakeholder pensions and the like. If we can help the low-paid not to rely wholly on benefits when they retire, and create a structure that is not potentially inimical to the provision of occupational pensions for low-paid employees, that too will be an advantage.
On that basis, I commend the amendments.

Mr. Ian Bruce: I am in two minds about amendment No. 43, which was tabled by my hon. Friend the Member for South Cambridgeshire (Mr. Lansley). Hon. Members will have noted that I have not countersigned it, although many amendments have been tabled by us jointly—by a South Cambridgeshire-South Dorset axis.
Let me first observe what the hon. Member for Lincoln (Gillian Merron) mistakenly understands to be the rules of the House, and declare an interest. The issue affects me personally, and has nothing to do with what the hon. Lady was rather foolishly engaged to do on behalf of Whips and Ministers. It is the Stepford tendency. I do not accuse Labour women so much; it is generally the men who do things without understanding the rules.
I am currently a director of a company, which pays only a small pension on my behalf. I do not take a salary, and I think that is important. I also advise the Telecommunications Managers Association. As I am going to describe something that happened to some of its directors, I thought that I should make that specific declaration.
I feel that I should draw attention to a problem with my hon. Friend's amendment, because the Minister will decide on regulations, or regulations will be decided on later. I refer to whether we want a pension contribution to signal that someone is receiving an income—whether a provision in the Bill saying that a pension is part of income can trigger a requirement for someone to do something that Ministers may not have intended.
I am simply saying that many people—particularly directors, but I am not going to repeat the arguments—do not receive a salary from a limited company, but some form of pension contributions are being made on their behalf. I shall not stray too far from amendment No. 43, which refers specifically to pensions, but clearly any other benefit in kind could trigger a situation in which someone becomes an employee according to the provision. I simply flag that up.
I wanted to tell the House about the Telecommunications Managers Association, which has a number of volunteer directors. Although they have portfolios, they work totally voluntarily. When acting on behalf of the TMA, they may be publicly liable. Therefore, quite rightly, the TMA decided to take out public liability insurance for them. The Inland Revenue then decided that they should be treated as employees of the company. It is a relevant issue, and I am sure that you, Mr. Deputy Speaker, know why I am raising it.
Any benefit in kind covered by amendment No. 43 might trigger something that the Minister does not want to trigger in respect of people who are not employed in the normal way. The Minister of State was trying to insist that someone was not an employee because they did not have a contract of service and were working voluntarily; however, they could still be caught by the regulations and by amendment No. 43..

Mr. Boswell: My hon. Friend the Member for South Cambridgeshire (Mr. Lansley) is to be commended for introducing the amendments. They are an example of the focused approach that he and my other hon. Friends have applied consistently in Committee and on Report. The amendments do not represent a blanket solution. Having thought about the issues, my hon. Friend is proposing two different solutions—an inclusive one for pensions and an exclusive one for training. I hope that the Government will not sling the charge that we are trying to include everything in order to depress the real value of the national minimum wage that they intend to introduce.
On the pensions side, I agree with my hon. Friend that pensions are, and should be treated as, deferred pay. As he has said, they are a major cost element in the total remuneration package—one which is even greater thanks to the Government's imposition of an unwelcome pensions tax which has considerably increased employers' costs.

Mr. Ian Bruce: Before my hon. Friend leaves that point, I am sure that he knows that the European Court has already ruled that pensions are part of pay. That was the problem we had about men getting a lesser pension benefit than women. It was why the Barber judgment resulted in our having to change the retirement age for women.

Mr. Boswell: Precisely; although whether it would carry across into the context of the minimum wage is a separate issue which Ministers will no doubt be considering.
On the training side, again I agree with the proposals of my hon. Friend the Member for South Cambridgeshire. I have a rather personal reservation about what might be called the quantum approach to training—the number of

hours of entitlement—as I do about counselling. I am not sure whether personal activities should be treated in such a mechanistic way. In any case, there is a real difficulty conceptually in imparting a market value to training. Should it be by reference to the cost of provision and how should that be determined? Should it be at the margin or the average cost or by a commercial counterpart bidding for the service? Would it be necessary for an internal operation to have to work at arm's length in order to establish a transparent cost of training?
I very much agree with my hon. Friend that it would generally be desirable to encourage training by disregarding it for the purposes of the national minimum wage. It is an extremely important activity for the individual worker, in terms of the acquisition of basic skills that he was implying was part of the costs—that is a subject dear to my heart—progressing through national vocational qualifications and others right up to management grades. It is important at all levels of attainment. At the same time—here I add a slight note of reservation—it is important not to structure training in such a way as to create a disincentive to the company to carry it out. In one sense, excluding it from the national minimum wage remuneration package might be said to do that. However, I answer that readily by saying that the training should represent real value to the employer as well as to the employee. It should increase productivity; therefore, it is entirely sensible to draw the balance of distinction as my hon. Friend has done.

Mrs. Roche: I shall deal with the amendments in turn. My reasons for not supporting them are the same in each case, but there are differences between them.
The aim of amendment No. 43 is to ensure that the Bill states that an employer's contributions to pension funds on behalf of the employee will count towards remuneration for national minimum wage purposes. That would reduce the cash value of the minimum wage. No decision has yet been taken on the components of the rate.
The amendment would prejudge the Low Pay Commission's recommendations. The Government's evidence to the commission included a table showing some of the components of pay, which has been sent to all members of the Committee. I know that they found it helpful. That illustrates how complex the issue can be. I make no bones about that. That is why we have asked an independent consultative body to examine the issue and come up with recommendations.
There has been recognition this evening by hon. Members on both sides of the excellent job that the Low Pay Commission is doing. [Horn. MEMBERS: "Oh."] The hon. Member for Daventry (Mr. Boswell) was kind enough to praise its work earlier. Hon. Members on both sides also said in Committee that the Low Pay Commission had taken evidence from a full range of employers and employees throughout the country.
Clause 2 will provide the necessary flexibility to reflect whatever recommendations are made.

Mr. Lansley: In relation to evidence to the Low Pay Commission and precedent, does the hon. Lady accept that the Agricultural Wages Board has examined pension contributions? It proposes that employers'


pension contributions for employees should be included in remuneration and treated as part payment of the minimum wage.

Mrs. Roche: Tempting though it may be, those are matters for the Low Pay Commission. I do not want to prejudge its conclusions, as the amendments would. Being overly prescriptive would undermine the twin-track process.
The same objections apply to amendment No. 44, which deals with that part of an employer's expenditure that is attributable to training. The amendment would have interesting effects, but the objection to it is the same, regardless of whether such expenditure counted as part of workers' remuneration: the amendment would prejudge the recommendations of the Low Pay Commission.
I said repeatedly in Committee that clause 2 is an enabling clause—it is not prescriptive. The issue is one for the Low Pay Commission. Both amendments would seriously inhibit the flexibility of clause 2. If the amendments are put to a vote, I urge my hon. Friends to oppose them.

Mr. Lansley: I am disappointed that the Minister gave the reply that she had planned before I had moved the amendments. I hoped that I had so constructed my arguments that she might bend and allow at least the amendment on training. I understand that the amendment on pensions would deny the Low Pay Commission the flexibility to come to a different—albeit wrong—conclusion. I thought that I had shown that, whichever way the Low Pay Commission went, the Bill would have provided a reasonable solution.
I am disappointed with the Minister's response. When the time comes, I hope that Ministers and the Low Pay Commission will respond in the regulations to be brought before the House. In view of that, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3

EXCLUSION OF, AND MODIFICATIONS FOR, CERTAIN CLASSES OF PERSON

Amendment made: No. 21, in page 3, line 9, at end insert—
'(4) If any description of persons who have attained the age of 26 is added by regulations under section 4 below to the descriptions of person to whom this section applies, no provision shall be made under subsection (2) above which treats persons of that description differently in relation to different ages over 26.'.—[Mr. Betts.]

Clause 4

POWER TO ADD TO THE PERSONS TO WHOM SECTION 3 APPLIES

Amendments made: No. 22, in page 3, line 11, leave out 'further' and insert
'descriptions of persons who have attained the age of 26 to the'.

No. 23, in page 3, line 17, after 'ages' insert 'over 26'.—[Mr. Betts.]

Clause 5

THE FIRST REGULATIONS: REFERRAL TO THE Low PAY COMMISSION

Mr. Boswell: I beg to move amendment No. 55, in page 3, line 20, after 'regulations', insert
'(or where it seems appropriate to him any subsequent regulations)'.

Mr. Deputy Speaker (Sir Alan Haselhurst): With this, it will be convenient to discuss the following amendments: No. 1, in page 3, line 32, leave out 'and'.
No. 2, in page 3, line 36, at end insert
'; and
(f) the extent to which the single hourly rate which the Commission recommends should be prescribed under section 1(3) above will have different economic effects in different areas of the country.'.
No. 75, in page 3, line 36, at end insert—
'(2A) The Secretary of State shall issue to the Low Pay Commission at the time of making the reference referred to in subsection (1) above a statement of objectives indicating to the Low Pay Commission any effects which the Secretary of State wishes to achieve and any effects which he wishes to avoid as a result of regulations to be made under section 1(3) or (4) or 2 above and the Low Pay Commission shall take such objective of the Secretary of State into account in making its report as prescribed by subsection (3) below.'.
No. 57, in page 3, line 39, after 'Prime Minister', insert
'the Chancellor of the Exchequer.'.
No. 58, in page 3, line 40, at end insert
'and the Commission may make such recommendations ancillary to their main recommendations as may seem to them to be appropriate.'.
No. 49, in page 3, line 40, at end insert—
'(3A) The Secretary of State shall lay before both Houses of Parliament a report made under subsection (3) as soon as possible after it has been made.'.
No. 78, in page 4, line 4, at end insert—
'(ca) to prescribe under section 1(3) above a single hourly rate which exceeds the average wage paid to the lowest-paid decile of workers (whether or not the Commission so recommends), or'.
No. 59, in page 4, line 9, after 'State' insert
'promptly and not less than one month in advance of the laying of such regulations'.
No. 60, in page 4, line 14, at end insert
',subject to the laying of a report before each House of Parliament containing a statement of the reasons for the decision in respect of matters contained in these regulations'.
No. 61, in clause 6, page 4, line 15, leave out 'at any time'.
No. 62, in clause 7, page 5, line 25, after '(a)', insert
'within one month of its receipt.'

Mr. Boswell: 1 judge from your tone, Mr. Deputy Speaker, that you have correctly spotted that this is something of a rag-bag collection of amendments, all of which are key to the operation of the Low Pay Commission. I make no apology for such a collection, not least because some of the amendments should properly have been debated in Committee. Owing to the breakneck pace of our consideration, and despite the fact


that the amendments had been tabled, they were not able to be debated because we caught up with ourselves. However, like a bad penny, they come back and will be discussed. I shall briefly summarise the amendments tabled in the names of official Opposition Front-Bench spokesmen, without adding any particular spin to them. I could leave my remarks at that—not least because I suspect that the House wishes to make progress.
Amendment No. 55 provides that it will not simply be in making the first regulations under sections 1 or 2 of the Act that the Secretary of State shall refer matters specified to the Low Pay Commission for its consideration. Any subsequent regulations would be included. That is a sensible provision. I hope that the Low Pay Commission will be consulted and have important things to do.
Of course, I understand that strategic recommendations must be made at the beginning, but they may need revisiting from time to time. The Low Pay Commission should not feel inhibited from doing that. I suspect that Ministers will say that, under subsequent clauses, such as clause 6, it is open for the Secretary of State to refer any subsequent matters to the Low Pay Commission. It would be interesting if the Low Pay Commission's recommendations were overturned by the Secretary of State. She would have to give reasons to the House for that decision.
Amendment No. 57 would add the Chancellor of the Exchequer to those luminaries, the Prime Minister and the Secretary of State, to whom the Commission must deliver its recommendations. That is, in a sense, a rewrite of new clause 14—which I shall not re-debate—about the role of the Chancellor in economic management and the central importance of all that to the impact on the economy.
In amendment No. 58, we provide that the Low Pay Commission may make ancillary recommendations as may seem appropriate to it. That is simply to prevent the commission from feeling that it cannot go any further than its very limited terms of reference in order to say anything useful about anything else. It may well have something useful to say.
The Under-Secretary was kind enough to say that I had said that the Low Pay Commission was doing a good job. That was a slight embellishment on what I said—although it is certainly going about its work with a will and it should not be prevented from saying anything interesting that it might have to say.
Amendment No. 49 and amendment Nos. 59 to 62 are about dilatoriness. We do not want the Secretary of State to sit on a report when she has it; we do not want her to be slow to bring forward her recommendations to Parliament. We need a reasonable time to consider them.
Amendment No. 61 is slightly different. It relates to clause 6(1), which provides:
The Secretary of State may at any time refer to the Low Pay Commission such matters relating to this Act as the Secretary of State thinks fit.
The amendment deletes the words "at any time". It is a probing amendment, because we want to know the Government's intentions toward the Low Pay Commission; so far, we have failed to discover them. We should very much like to know how the

Government want to use the Low Pay Commission in future. It would be helpful if the Minister of State placed that on the record. [Interruption.]

Mr. Deputy Speaker: Order.

Mr. Ronnie Campbell: Three pounds fifty an hour.

Mr. Deputy Speaker: Order.

Mr. Boswell: I resume, when calm is restored, by moving on to amendment No. 78, which is qualitatively different from the preceding amendments. It provides that if the Secretary of State comes up with a rate that exceeds the average wage paid to the lowest-paid decile of workers—whether or not the Low Pay Commission had so recommended—she must lay a report before each House of Parliament, containing a statement of the reasons for the decision.
I return to the importance of rates, and the important implications of any escalation in the rate of the national minimum wage for wage costs generally. It is not a simple matter. The figures escalate alarmingly as the national minimum wage increases, as we have shown in relation to the public sector. I shall refresh hon. Members' memories, using the House of Commons research paper for convenience.
At £3 an hour, 7 per cent.—I round the figures—of the working population would be affected; at £3.50, 13½per cent; and at £4, 20 per cent. There is a sharp escalation from a quite small impact—which, as the CBI has suggested, may be more or less manageable in the economy—at the £3 rate, depending on what happens to differentials, to a very major impact indeed, with or without differentials, at £4.
The implication of amendment No. 78 is that the Secretary of State should be obliged to give reasons for any significant impact of the national minimum wage so far as it is in excess of the bottom decile of earnings. If the Minister of State is sincere in his wish to help poverty wages, he must target his activities, and it seems a reasonable target, within the parameters of what the Minister of State and the Government wish to do, to concentrate on those in the bottom 10 per cent. of earnings.
I apologise for the wide-ranging nature of the amendments. I believe that they raise important points, which deserve a brief Government response, and I commend them to the House.

Mr. Chidgey: I hope that I shall not detain the House long. I shall speak especially to amendments Nos. 1 and 2. They provide for the Secretary of State to refer to the Low Pay Commission for consideration the extent to which a single hourly rate of the national minimum wage may have different economic effects in different parts of the country.
The amendments arise from robust and lengthy debate in Committee and on Second Reading, and reflect the fact that the Government have long argued that, for equity—as they see it—of the national minimum wage, there should be a single rate throughout the United Kingdom. Obviously, the Government intend to lift all those who are on poverty wages out of poverty wages, wherever they arise. Most of us would share and support that sentiment.
The Government also argue that the number of people on poverty wages does not vary much from region to region. If I remember correctly, the Minister gave us the figures earlier—it is about 55,000 in the south-east and about the same in the north-east.
I do not wish to replay the debate in Committee, but the proportion of those on poverty wages varies in different parts of the country. The difference between the proportion of the low-paid working in the south-east and in other parts of the country is particularly significant. That is supported by much evidence from, for example, the new earnings survey, the Low Pay Commission and the Trades Union Congress, and I do not think that it could be questioned or disagreed with. The ratio is substantial. As a proportion, it is about three times as many on poverty wages of less than £3.50 an hour in the north-east as in the south-east. Those facts and statistics are pretty robust.
We have debated at great length the cases for and against regional variations in the national minimum wage. The Government have made clear their position, which is well understood. However, it is important to examine the issue without setting up hypothetical cases that could be knocked down to support the argument, which was a tendency earlier in the passage of the Bill.
I want to address the Government's mind to the fact that there are those concerns—there are changes and variations. If, as we are told and as will no doubt happen if the Bill becomes an Act, there is to be a single national minimum wage rate, determining its economic impact on different parts of the country is a key factor. Because of the nature of the work of small businesses and how they operate, they have a preponderance of the low-waged within their work force. We may argue at length about whether that is a good or a bad thing, but it is a fact and the House would be doing the nation a disservice if it ignored the fact.
That is why I want to press the matter a little further and try to get a response from the Government, who are in danger of setting the Low Pay Commission on the horns of a dilemma. They have decided on a national rate, but if it is to lift the lowest-paid out of poverty in the south-east, it must be significantly higher than the lowest wages paid in other regions. On the other hand, the rate set helps those in the lower-waged parts of the country—

Mr. Ronnie Campbell: Liberal fudge.

Mr. Deputy Speaker: Order. I am sorry to interrupt the hon. Member, but it would be helpful if the hon. Member for Blyth Valley (Mr. Campbell) would conform to the rules of order of this House and allow the debate to continue in the orderly manner that has been its characteristic so far.

Mr. Chidgey: Thank you, Mr. Deputy Speaker. I was pointing out the difficulties that may arise through setting a national rate because of the impact on different economies in different parts of the country.
The Government have made firm statements about setting great store in supporting a new social partnership in terms of industrial relations and our economy—surely

something about which few of us would argue. It is to be a partnership between business, employers and Government—all stakeholders in a stakeholder society. My concern is to ensure that that partnership lasts, grows and develops. If that is to happen, we have to take account of the justifiable concerns of small businesses in less prosperous areas.
As the Minister will probably realise, small businesses are concerned about balancing increased labour costs with investment in staff training and increased productivity and against the comfort of knowing that cowboy firms will no longer be able to undercut their competitors by paying poverty wages. Those are the issues at stake.
To achieve and maintain that balance, to reassure small businesses throughout the country and to strengthen the social partnership, it is essential for the Low Pay Commission to tackle the problem of the different economic impacts in different areas of the country as a result of the introduction of a single national minimum wage. As we know, the Low Pay Commission is an independent body. The Government cannot pre-empt its judgment, instruct it to come to certain conclusions or preordain the results of its deliberations. However, to reassure and comfort those who feel threatened or uneasy about the impact of the national minimum wage in their region, the Government can instruct the Low Pay Commission what it may and may not consider.
I do not expect the Government to make any admission tonight of the different impacts, but I should like them to reassure the House that the Low Pay Commission will include in its deliberations a report on the different economic impacts that will occur in different areas. The Government say that the Bill is enabling legislation, and that the detail will emerge from the report of the Low Pay Commission to form the basis of secondary legislation. As we know, the devil is always in the detail. The House needs the details from the commission's report to scrutinise effectively that secondary legislation. I look forward to the Minister's response and, I hope, some reassurance on this issue.

Mr. Hammond: As hon. Members may have noticed, when we come to the end of this group of amendments, we shall be halfway through the selection paper. It will be appropriate to accelerate the pace of debate, so I shall attempt to be brief in my remarks. I shall look forward to hearing what the Minister has to say in reply.
4 am
I shall speak briefly to my amendment No. 75, which would require the Secretary of State, when making a reference to the Low Pay Commission, to give it guidance on the
objectives…which the Secretary of State wishes to achieve".
The Bill requires the Low Pay Commission to take into account the impact of the minimum wage on the United Kingdom economy as a whole and on competitiveness. It avoids the issue that many hon. Members believe to be the most important—the minimum wage's sectoral or regional impact. That issue should be addressed.
There will inevitably be a trade-off between jobs and other objectives behind the minimum wage. The Low Pay Commission should not have to make essentially political judgments and decisions. It is perfectly legitimate to ask it to report on the appropriate level of the minimum wage within parameters that Ministers have set, but unless the minimum wage is set at any but the very lowest level, it will cost jobs. In considering their wider objectives, the Government may have contemplated what cost to jobs they would find acceptable. The amendment would require the Government explicitly to spell out their aims and the relative weight that they give to their different objectives.
I do not want to be unduly controversial, but I take it as read that the Government would rather that the introduction of the national minimum wage had the lowest possible cost to jobs. It was suggested in the financial memorandum that if the national minimum wage was set at a sensible rate, it might have no impact on employment. Both the chairman of the Low Pay Commission and no less a person than the Deputy Prime Minister have publicly stated that that is not the case and that there will, of course, be a cost to jobs. I tabled the amendment to ensure that the Government explain how many jobs they are prepared to see lost and the other objectives that they want to achieve.
To illustrate the point, I set out my prescription for the statement of objectives that the Government would be obliged, if the amendment were accepted, to give to the Low Pay Commission.
One objective might be that the minimum wage should be set at a level that would not have a significant negative effect on jobs. The Secretary of State could also ask the commission to minimise the impact on the most vulnerable regions and sectors, as opposed to the economy as a whole. A single rate, across regions and sectors with different employment characteristics, will clearly affect some more badly than others.

Mr. Letwin: My hon. Friend has listed what he thinks the Government should try to avoid. What would he expect them to include as positive objectives?

Mr. Hammond: I would expect them to list poverty reduction as one of the principal objectives, but there is plenty of evidence to suggest that the introduction of a minimum wage will not have a great impact on poverty, because in-work poverty is a relatively small component of total poverty. I do not suggest that any erosion of poverty is not warmly to be welcomed.
The Government's statement of objectives might include some reference to disproportionate cost, and a cost-benefit analysis. The evidence suggests that the impact on poverty might be quite small. Most commentators have accepted that there will be an impact on jobs. The statement suggested in amendment No. 75 should give the commission an idea of what trade-off between job losses and the reduction of in-work poverty the Government would regard as acceptable.
The commission could then go about its work in a technocratic way, with the political parameters already defined. It could make recommendations that it believed would give effect to the objectives set by the Secretary of State.

Mr. Ian McCartney: Good morning, Mr. Deputy Speaker. I do not believe that anyone has wished you good morning since you came in to chair our proceedings.
The hon. Members for Daventry (Mr. Boswell), for Eastleigh (Mr. Chidgey) and for Runnymede and Weybridge (Mr. Hammond) should know that the subjects of the amendments have been covered extensively in many hours of debate in Committee, including two all-night sittings. That is not to say that we should not discuss them here. I shall deal with each amendment in turn, but without extensive debate, given our previous discussions.
The amendments fall mainly into the category of unnecessary, although not harmful. The hon. Member for Runnymede and Weybridge said two things that should not go unchallenged. First, there is no evidence that a sensibly set minimum wage will cost jobs. Secondly, no survey among employers during the passage of the Bill has been anything but positive.
The Income Data Services survey shows that employers are already moving to increase wages in advance of a national minimum wage, especially for their lowest-paid employees. Already, and even before the introduction of the national minimum wage, employers are beginning to move towards the Government's strategy of preventing and eradicating low-paid employment.

Mr. Hammond: rose—

Mr. McCartney: I will give way to the hon. Gentleman, because he was such a help to me in Committee.

Mr. Hammond: I accept the Minister's point, but does he agree that the issue is not whether the national minimum wage will reduce low pay but whether it will reduce poverty? Evidence suggests that low wages are not typically paid to heads of households and that the reduction of poverty by the national minimum wage will be relatively limited.

Mr. McCartney: It will do both. The hon. Gentleman's point reveals the heart of the Conservatives' sometimes sexist language. They think it is fine if a husband is well paid, but they think that a wife, by virtue of marriage, should remain badly paid. That is not acceptable. We want to eradicate poverty and to create fairness in the workplace.

Mr. Boswell: rose—

Mr. McCartney: I would be grateful if the hon. Gentleman will give me a chance to say something about the amendments before I allow him to intervene.
Amendment No. 55 would require the Secretary of State to consult the Low Pay Commission after the initial setting of the minimum wage and before making any further regulations—for example, to uprate the minimum wage—but only


where it seems appropriate to him".
That is neither fish nor fowl and is certainly unnecessary. Clause 6(1) already allows the Secretary of State to refer matters to the commission at any time. The Bill does not need another provision saying effectively the same thing.
Amendment No. 61 would delete the words "at any time" in relation to the Secretary of State's power to make further referrals to the Low Pay Commission. That is contrary to the proposals in new clause 8, also tabled by the hon. Member for Daventry. It is also unnecessary, because the deletion would make no difference to the meaning of the provision except perhaps to make it less clear.
Amendments Nos. 1 and 2 would add to the matters that the Low Pay Commission must consider. They would make the commission take into account the different economic effects of the minimum wage in different regions. I can assure the hon. Member for Eastleigh that the amendments are unnecessary. The remit of the Low Pay Commission already covers that issue. My right hon. Friend the President of the Board of Trade sent a letter to Professor George Bain, chairman of the commission, on 23 September 1997, which stated:
the Low Pay Commission should have regard to the wider economic and social implications; the likely effect on the level of employment and inflation; the impact on the competitiveness of business, particularly the small firms sector; and the potential impact on the costs to industry and the exchequer.
It is clear that any consideration of the wider economic implications would include the differing circumstances around the country and that is exactly what the Low Pay Commission has done.
The hon. Member for Eastleigh, in his short contribution to the debate, made an important point and I do not disagree with it, but I shall approach it from another angle. It is right to say that the percentage of the work force that suffers from low pay differs between the regions—significantly in some cases. However, that percentage is irrelevant to the individuals who suffer from low pay. That percentage does not pay their bills or put money in their children's pocket. It does not pay the rent or the electricity and gas bills, and it does not enable them to put money aside for pensions, holidays, Christmas or all the other things that many families take for granted.
After 18 years of Tory government, the level and intensity of low pay is almost identical in each region—north, south, east and west. For example, in the south-west, 87,000 people earn less than £2.50 an hour and more than 55,000 families receive family credit. In London, the figures are the same—87,000 people earn less than £2.50 an hour and more than 55,000 families receive family credit. In Yorkshire and Humberside, 89,000 earn less than £2.50, with more than 85,000 families receiving family credit. It is the same across the country, in region after region.

Mr. Chidgey: Does the Minister accept that the amendment was not intended to dispute those figures? It dealt with whether a single national minimum wage would have different impacts on different regional economies. I agree about the effects of poverty on individuals and about the number of people in poverty.

Mr. McCartney: The hon. Gentleman, in most of what he said on Second Reading, in Committee and now, has

supported the concept and principle of the minimum wage, unlike official Opposition Members who have mostly tabled proposals that attack the heart of the Bill. Except for one amendment in Committee, he has rightly chosen not to do that. He believes in the principle of a minimum wage. I accept that his strength of feeling on the matter is no less than mine.
4.15 am
Hon. Members know that the commission has gone far and wide in its pursuit of evidence. It has visited a number of regions in England as well as in Scotland, Wales and Northern Ireland. It has been as thorough a piece of consultation as I can imagine, and has been warmly welcomed by business, employee organisations, trade unions and low pay organisations. Across the country, it has been appreciated that the commission has carried out its work thoroughly.
The hon. Member for Eastleigh need not worry, although I suspect that I may be not be able to stop him. Veterans of the Committee know that this is not the first time that we have heard those points from him. If he is still not convinced that the Low Pay Commission is paying full regard to regional differences, I have further good news for him. The Government's evidence to the commission deals with variation between regions. Paragraph 22 states:
The Commission have been asked to recommend a single national rate. However, this rate will need to apply in a range of different local circumstances.
The evidence goes on to provide a wealth of data analysing pay in different geographical areas. Nowhere does it attempt to gloss over variations in the cost of living, labour market and industrial composition of various regions. Those are important matters that need to be considered by the commission, and it will do so.
I emphasise again what some hon. Members have heard me say before: low pay exists in all regions. There is poverty pay everywhere in the country and it will take a national minimum wage to end it. I hope that what I have said will mean that the hon. Member for Eastleigh will not press his amendments. If not, I must urge the House to vote against them.
I apologise to the hon. Member for Daventry, whom I invited to intervene earlier.

Mr. Boswell: I am grateful to the Minister for his courtesy in remembering. In a sense, the occasion has passed. As he accused Conservative Members of being in a degree sexist, will he confirm that he will oppose any proposals to rescind the major social advance created by the Conservative Government of independent taxation for husbands and wives?

Mr. McCartney: I may have an accent similar to that of the Chancellor but I am not my right hon. Friend and the hon. Gentleman will have to wait. It was a previous Labour Government who introduced equal pay legislation in the teeth of opposition from Conservative Members. I remember the arguments from when I was a small lad. I am still a small lad, but slightly older.
That reminds me that I recently went to a function to talk about social partnership. Just before I went on stage, a helpful gentlemen told me that the podium was large


and that they had got me a box to stand on. I thought that it was a joke until I got out there. The good news was that there was a box; the bad news was that it had wheels.
Conservative Members used to argue that equal pay would lead to hundreds of thousands of job losses among women. Not only was that not true; more women are in the labour market than ever before. That trend will continue with the Labour Government's proposals for assisting with pre-school and after-school facilities that will allow many women who are carers to take opportunities in the labour market that did not exist under the Conservative Government.
Amendment No. 75 focuses on the remit of the Low Pay Commission. It would require the Secretary of State to set objectives for the outcome he or she wished to achieve as a result of the minimum wage, which the commission would have to take into account. The commission would also have to take into account any objectives the Secretary of State did not wish to achieve.
Given those dictatorial requirements, I wonder why the Secretary of State would want to refer matters to the commission in the first place. The amendment would, in effect, dictate to the commission what its report and recommendations should say. It would undermine the commission's independence and be entirely counter-productive. I have said many times how much I value the commission as a source of advice to the Government. There would be no better way of impeding the commission and its works than by putting it in the straitjacket proposed by the amendment. The amendment falls into the "harmful" category and I ask the House to reject it.
Amendment No. 57 would require the commission to report to the Chancellor of the Exchequer, as well as to the Prime Minister and the Secretary of State. We have already covered this issue in Committee. The Bill reflects the dual reporting arrangements established for the school teachers pay review body. That does not imply that only the Prime Minister and one Secretary of State will be involved. The amendment falls into the "unnecessary but slightly irksome" category, because it is plain to me that the commission's report will be considered collectively, as part of the good administrative practice of the Government. The Government will put a collective effort into presenting evidence to the commission; no doubt it will come to a collective view on what emerges. There is no need for an amendment that seeks to single out individual members of the Cabinet in this respect.
Amendment No. 58 falls into the "slightly obscure" category, even after the explanation offered by the hon. Member for Daventry. It seems to suggest that the commission could downgrade its recommendations on the key factors referred to it by the Secretary of State—for example, the rate for the minimum wage—by comparison with other recommendations. It is, of course, open to the commission to set out its recommendations as it wishes, so the amendment is unnecessary. In addition, it remains open to the Secretary of State to determine the outcome. Amendments Nos. 49, 59, 60 and 62 have to do with various reporting requirements and they are all unnecessarily overprescriptive.
I invite the hon. Member for Daventry to indicate whether he wishes to press the amendments to a vote. If he does, I shall ask Labour Members to resist them. I hope that hon. Members on both sides of the House will be

reassured by the answers I have given in respect of the issues raised by the hon. Members for Eastleigh, for Daventry and for Runnymede and Weybridge.

Mr. Boswell: This has been an interesting debate that has ranged across many different issues. I do not entirely accept what the Minister has said, especially in respect of amendment No. 58. I should be tempted to take the mind of the House on the amendments. Given the width and breadth of the group, some of my colleagues might feel more strongly than I do. To borrow a phrase, perhaps we should just see how it goes.

Amendment negatived.

Clause 9

DUTY OF EMPLOYERS TO KEEP RECORDS

Mr. Chidgey: I beg to move amendment No. 3, in page 7, line 28, at end insert—
'(2) Regulations made under this section shall require employers to keep records in respect of—

(a) full-time workers;
(b) part-time workers;
(c) home workers;
(d) agency workers; and
(e) such other classes of worker as may be prescribed and may impose different requirements in respect of different classes of worker.'.

Mr. Deputy Speaker: With this, it will be convenient to discuss the following amendments: No. 63, in clause 29, page 20, line 2, after 'so', insert 'without good reason'.
No. 64, in page 20, line 11, after 'particular', insert
'or knowingly fails to disclose any record or information which he knows to be relevant to the case'.
No. 65, in page 20, line 18, at end insert—
'(5A) A person should not be prosecuted under this section unless the officer investigating the case is satisfied that all reasonable steps have been taken to satisfy the interests of the worker or workers concerned through the civil proceedings set out elsewhere in this Act.'
No. 4, in clause 33, page 22, line 14, after 'section', insert 'and section 9(2) above'.

Mr. Chidgey: The amendments would require employers to keep records of full-time workers, part-time workers, home workers and agency workers. Their fundamental thrust concerns the plight of people who want to be home workers for reasons of economic necessity and who fall foul of what can only be described as criminal schemes to fleece them of what little cash they have.
Last week, with the help of my staff, I uncovered a scam. It is a simple affair. People respond to an advertisement in the free papers that are available in all parts of the country. It offers an opportunity to work at home and to earn substantial amounts of money. When they send their post-paid return envelope, back comes a load of literature telling them how they can earn £1.50 to £2 per envelope. It must be a magic envelope. The company thanks them for their inquiry and tells them that they have been specially selected because it needs people


in their area to do this work from home. It explains that they will have a chance of financial freedom and an opportunity to make as much money as they want.
Such companies are anxious to engage only serious people. To ensure that people are serious, they are asked to pay a small registration fee of £10, £15 or £20. I am advised by the National Group on Home Working that people part with their money and receive useless stuff that they are told to assemble into a kit and to send back to the firm concerned. They do so, only to find that they have failed to meet the quality standards that the firm says they must meet, although it does not define them. People do not get paid £2 or even £1.50 an envelope, and they do not get their registration fee back.
That is just one example of criminal behaviour under the guise of providing work for home workers. My staff pursued the case and went to the address on the information that was sent to them. The fancy address referred to a suite in London but it turned out to be one of several letterboxes on the wall of a little post office or corner shop in London. When the proprietor saw my staff trying to find what on earth was going on, he said, "We have had many people trying to get their £15 back."
4.30 am
The amendment illustrates the need for keeping records for home workers so that we can try to check on people who make dubious or criminal offers of employment—which turn out to be non-employment—to home workers who are already desperately short of money. I have given just one example of what is going on. The Minister will be aware of a code of practice that has been put together by the Advertising Standards Association. The Minister will be interested in the comments and recommendations of the National Group on Home Working. My amendment provides an opportunity to raise this issue and to warn people of the risk of being criminally parted from their money by those selling bogus home working schemes.

Mr. Forth: What is the process of registration? The hon. Gentleman speaks about it as if it is the answer to all the problems that he has outlined but I am not clear on whom the responsibility for registration will fall and how it will work. Can he give us more details?

Mr. Chidgey: I should be delighted to do that. If the right hon. Gentleman refers to the Bill he will see the necessity for employers to keep records. National minimum wage officers will make sure that employers maintain such records. [Interruption.] Perhaps I may be allowed to explain the matter. The right hon. Gentleman surely understands the need to ensure that employers who deal mainly or totally with home workers keep records for them that are as full as those that are kept for full-time employees working in company premises.

Mr. Hammond: Does the hon. Gentleman agree that it is also essential for home workers to keep records because the employer will not be privy to everything that goes on in the homes of those people and how many hours are spent on a given task?

Mr. Chidgey: I do not disagree with the hon. Gentleman. If he is aware of the recommendations offered by the National Group on Home Working, he will know that it is eager for home workers to keep such records and to join the group so that they have additional protection.
I think that I have clearly explained the reason for the amendment and I hope that the Minister will be able to provide some comfort and perhaps provide information on how the Government are addressing a serious issue that could affect many thousands of the poorest people in society.

Mr. Boswell: I do not intend to follow the line of the hon. Member for Eastleigh (Mr. Chidgey), but that does not mean that I am out of sympathy with what he said. The amendments in my name and that of my right hon. Friend the Member for Wokingham (Mr. Redwood) are somewhat different, but they are of a piece because they reflect the concern of many hon. Members to get the legislation right and to ensure a fair income. As the Minister knows, perhaps more concern was expressed about what is now clause 29 on legal offences than on almost any other part of the Bill. That is proper, because criminal offences are serious matters and prosecutions should not be lightly undertaken. They certainly have a major impact, particularly if an employer is guilty of a technical offence.
I know that the Minister will tell me that the intention is that prosecutions should be reserved not for technical offences, but for serious failures to comply with the legislation. We have no time for proceedings against technical offences either, but it is important that we do not stumble into something by accident.
Amendment No. 63 requires that a person should be required to keep or to preserve any record and that, if he fails to do so "without good reason", that would be an offence. We added the words "without good reason" because we were concerned that people might inadvertently have records destroyed through no fault of their own. For example, I mentioned in Committee the possibility of the millennium bug, a fire or even a malicious employee destroying records. Those are all potential scenarios. I think that the Minister has covered this in a different group of amendments by providing for a due diligence defence, but I should be grateful if she would comment on the matter.
Amendment No. 64 relates to a different point, which goes back to the exchanges between my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) and the hon. Member for Eastleigh. It relates to people who may have information that they know bears on the case, but which they are not disclosing. I do not know whether the aims can be effectively achieved but, again, I should appreciate a response from the Minister.
If people are asked for material about a particular case and disclose some material that may or may not have been requested, but knowingly fail to disclose something else that they clearly know is relevant to the case—for example, if a home worker has kept home-working records that give a different story from the one that he or she claims—that should, in principle, be an offence. It is not an easy one to prove. There is an important point of balance here between the liberty of the individual, whose business and reputation may be at risk, and the aim of the provision.
I broadly describe amendment No. 65 as a last-resort amendment. We ask that the prosecution should not be proceeded with unless it is absolutely the last resort in that civil remedies have failed. That is entirely consistent with paragraph 44 of the regulatory appraisal that the Department has produced, which says:
We would not expect the enforcement agency to pursue criminal prosecutions except as a last resort after other enforcement mechanisms had failed, since the main purpose is to ensure compliance rather than exact punishment. But there needs to be a penalty for any who continue to flout the law.
I have no difficulty with that paragraph. Indeed, we have tried to put it into legislative form in our amendments.

Mr. Collins: I should like to confine my remarks to amendments Nos. 3 and 63. I shall take the second of those first.
It is important to bear in mind the fact that the records of many employers are, through no fault of their own, destroyed, as my hon. Friend the Member for Daventry (Mr. Boswell) has said. A few months ago, a farmer constituent came to me in considerable distress because his family farmhouse had been burnt down and all his agricultural records had been destroyed. With the destruction of his records, he was unable to qualify for important Ministry of Agriculture, Fisheries and Food grants that he would otherwise have received. Therefore, because of that fire, he lost a material amount of income.
Without amendment No. 63, there would be a further risk. Farmers or other employers whose records were destroyed through no fault of their own—in the case of my constituent, the fire destroyed his home as well as his records of work—could find themselves liable to criminal proceedings for not having kept records. It was their intention to keep those records, but they were destroyed through fire, an act of God or another form of natural or man-made disaster. Amendment No. 63 is important for that reason.
Amendment No. 3, tabled by Liberal Democrat Members, is important for an entirely different reason. It is the point at which their mask slips. It has often been their contention that Liberal Democrats are the moderating influence on the Government; that they help to pull the Government towards the centre on some issues; and that in particular, unlike the Government, they have a long-standing tradition of support for enterprise, entrepreneurship and successful businesses. However, amendment No. 3 would take the provisions of an exceedingly bureaucratic, interventionist and top-down Bill and make them even more onerous on employers by specifying in great detail the way in which records, which are already required under the Bill, have to be kept and set out in different categories. For that reason, the House should reject amendment No. 3.

Mr. Bercow: I concur with my hon. Friend's sentiments. Does he agree that it would be marginally less bad if the Government had specified in the Bill the different regulations that would apply to different categories of worker? In fact, the pain would be much worse under the Liberal Democrat proposal because the regulations, which will contain various differences in respect of different categories of workers, will materialise

months or possibly years hence. So we have not only the tedium of the differences, but the pain of waiting to discover what the differences are.

Mr. Collins: Indeed, there is considerable pain and absolutely no gain for an employer, which shows how the Liberal Democrats are now a party of the left—the hard left—which has abandoned any pretence of being a pro-business party, or even an enterprising party. That is why amendment No. 3 should be rejected.

Mr. Hammond: I want to make a few brief comments about amendment No. 64.

Mr. Chris Mullin: On a point of order, Mr. Deputy Speaker. Would it be in order to add 5p to the rate of the national minimum wage for every hour that this nonsense goes on?

Mr. Deputy Speaker (Mr. Michael Lord): That is not a point of order for the Chair.

Mr. Hammond: More frightening would be to take 5p off the rate of the national minimum wage for every hour during the night that the hon. Member for Sunderland, South (Mr. Mullin) has not been in the Chamber listening to the debate.
Amendment No. 64 would create an offence of withholding information that is available and required in a relevant case. I want to take the Minister back to the question of asymmetry. There is no requirement in the Bill on workers—and I am referring specifically to home workers—to keep records. That point was raised earlier and I thought that I saw the Minister nodding to suggest that she recognised that there was a need for such a requirement. However, she did not deal with that in her speech, so I would like her to touch on it when she replies to this debate.
Does the Minister agree that for an employer even to know whether he has met his legal obligation to pay the minimum hourly rate for each hour worked in the case of a home worker, the home worker must keep records? It would be both consistent and symmetrical if the Bill contained an obligation for that home worker to keep records, in the same way that there is an obligation on the employer to keep records.

Mrs. Laing: I am concerned about the additional bureaucratic burdens which the requirement to keep complicated records will place on businesses, and especially small businesses. It would be interesting to know whether the Government have carried out, or intend to carry out, a compliance cost assessment, especially in relation to small businesses.
It is a serious matter to place a burden on employers, especially small employers, that can lead to criminal penalties, not just civil duties. A duty may be perfectly reasonable for a large company that has a large personnel department, legal advisers, accountants and so on, whereas a small business does not have those advantages and often has difficulty coping with bureaucratic requirements. Many small businesses in my constituency are struggling to keep afloat while satisfying the bureaucratic demands of the Inland Revenue and others to fill in forms. It is likely to be the final straw for such


businesses if extra bureaucratic requirements are placed on them without the Government having considered a compliance cost assessment and the consequences, which are also consequences for the employment of the very people whom the Government say they want to protect.

Mr. Roger Gale: I should like to speak primarily to amendment No. 65, although I should like first to comment on amendment No. 3. The hon. Member for Eastleigh (Mr. Chidgey), although suggesting the wrong solution, has highlighted a very real problem. Probably every hon. Member has represented constituents who occasionally have been fleeced by fraudulent—that is the only word for them—home-working organisations, or so-called organisations, which ultimately turn out to be, as the hon. Member for Eastleigh has so graphically described it, a fly-by-night letter box drop somewhere in north London. Someone runs off with a lot of money belonging to some of the very poorest people in the country.
The hon. Member for Eastleigh has, therefore, identified an absolutely genuine need. However, I agree with my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) that amendment No. 3 is a top-down solution. There must be a way under the straightforward fraud provisions of the criminal law in which we can bring to book such so-called companies. However, it is a matter not only of bringing them to book, but of then preventing them from springing up under another name, 30 seconds after they have gone into liquidation, with someone else's money.
With due respect to the hon. Member for Eastleigh—who has clearly put much effort into his amendment and who raises a real concern—I do not think that his amendment is the way forward. I shall, therefore, be unable to support it, although I have great sympathy for his cause.
I speak now to amendment No. 65. For 15 years, I have represented the constituency that has had the highest unemployment level in the south-east. It gives me no satisfaction to say that, although that unemployment rate is—or was—falling dramatically because of the previous Government's economic policies. Much of our new employment has been created not by very large companies moving into the constituency—they have not—but by small companies which are often one or two-man businesses. Those people occasionally grow sufficiently to be able to take on, very often, a young person—the type of person at whom the new deal is supposed to be directed.
The entire Bill represents a very considerable disincentive to those small businesses to take on new employees. Not only are small businesses now thinking that they will not take on new employees, but—in some instances, in family firms in which a husband and wife have taken on someone—they are determining whether they can lay off people by working longer hours themselves. They know that their business will not be able to sustain any meaningful minimum wage level.
If one imposes on that disincentive an entirely new structure and the threat of criminality for failing to comply with some pettifogging bureaucracy, there will be an even

greater disincentive to small businesses to take on the new employees whom I, as their Member of Parliament, want them to be able to employ. I agree entirely with my hon. Friend the Member for Daventry (Mr. Boswell) that any measure enforced through the criminal law should be a measure of last, not first resort.
All hon. Members have had experience of two types of people: of rogue employers, for whom I have absolutely no sympathy; and of disgruntled employees—who will make any complaint whatsoever against someone who, in good faith, has taken them on and tried to employ them well. Such employees have simply not come up to scratch by satisfying the requirements of the job. After they are fired, they go away and make one complaint after another, of one type or another. I believe that, if such a person can now go straight to criminal law before having exhausted the civil remedies that are already available, employment in my constituency, and every constituency represented by every Member of Parliament, can only fall. Small businesses simply cannot bear such a burden, and to suggest that they can does no service to future employment in this country.

Mrs. Roche: The amendments are mainly to do with the requirement to keep records, and with related offences.
Before dealing with the amendments specifically, let me explain the context of the Government's approach to enforcement. We devised the provisions broadly on the basis of a number of key principles. The first was effectiveness. Like all hon. Members, we want to ensure that those who flout the law are punished, and that any wrong that has been done is put right. Let me repeat what I have said a number of times in the House and in Committee: we are talking about a very small number of employers. Of course most employers obey the law and will want to comply with the Bill, and I cannot imagine that the Opposition will want to oppose the principle.
Secondly, we have built in flexibility. A number of enforcement routes are provided—enforcement by the individual or by the enforcement officer, enforcement by civil or by criminal proceedings, enforcement through industrial tribunals and enforcement through the courts. We have also allowed for the possibility of conciliation in cases of underpayment, and for such cases to be resolved without a tribunal. That approach avoids heavy-handedness and, I hope, will allow cases to be resolved swiftly and efficiently.
Finally, we have said that we want to consult on regulations under the Bill, including any regulations relating to enforcement—on record keeping, for instance. The feedback that we are getting from business, both large and small, suggests that our approach is broadly welcomed by the business community.
Reference has been made to our approach to small business. I entirely agree that small business is vital to the country's welfare, and I take a close interest in the issue. I think we can say that, in their short life, the current Administration have done a great deal for small business—so much, indeed, that, according to a recent survey, we are now in the political lead in the small business community. Small businesses admire not only our approach to the economy, but every other legislative aim that we have.
Amendment No. 3 is linked with amendment No. 4, which is purely consequential. I understand what the hon. Member for Eastleigh (Mr. Chidgey) was saying, and


sympathise with his case, which was echoed by the hon. Member for North Thanet (Mr. Gale). Amendment No. 3, however, is rather prescriptive: it seeks to prescribe the type of records that employers will be required to keep by making sure that records are kept for all workers in all categories. I have every sympathy with the thought behind the amendment.
Of course records should be kept for all types of workers, not just those conforming to the so-called standard pattern of full-time or nine-to-five work. We all know that the workplace is extremely varied, and is becoming even more complex. That is why, although sympathising with the hon. Gentleman's motives, we will ask the House to reject the amendment—if I do not manage to persuade the hon. Gentleman to withdraw it.

Mr. Chidgey: I follow the points that the Minister is making. My speech emphasised my particular concern about the abuse of people attempting to get home work. I would be grateful if she would address that specific point, as well as the main context and thrust of the amendments.

Mrs. Roche: Yes. We are interested to hear the point that the hon. Gentleman raised. I am sure that my hon. Friend the Minster of State would like to discuss the matter with him and that it would be a useful discussion. We deliberately did not make clause 9 prescriptive—rather, it provides the power for the Secretary of State to make the required regulations regarding record keeping. We shall not know exactly what records will be needed until the Government decide the detail of how to implement the national minimum wage in the light of the Low Pay Commission report. As I have said, we want to consult the business community about regulations, particularly on record keeping. It is quite right that the hon. Gentleman wants to make representations and we shall listen carefully.
The regulations will set out the type of records that employers will be required to keep and how long records must be kept. They will also provide differently for different circumstances and descriptions of worker. We chose that direction for very good reasons—to provide time to consider what records should be kept and to give flexibility. We want to avoid imposing unnecessary burdens on business.

Mr. Ian Bruce: Has the Minister considered whether there will be any de minimis requirements? For example, some people employ a cleaner for two or three hours a week. It is a low-pay sector that may concern the Government. Will there be a simple form of record keeping for the single householder who has taken someone on in that way?

Mrs. Roche: Of course we shall ensure that we do not impose unnecessary burdens on business. That is precisely why we chose the route we did and why consultation is important. Indeed, businesses in the hon. Gentleman's constituency may want to participate in that consultation. As I have said already, business has welcomed our approach.
The hon. Member for Runnymede and Weybridge (Mr. Hammond) mentioned home workers and I understand the point that he made. In many, if not all cases, under the employment contract or understanding with the home worker, the employer requires the home worker to keep records.
The Government have already explained that they will be consulting business on all the draft regulations. The recommendations of the Low Pay Commission will also be important, especially regarding the calculation of a worker's hourly rate for minimum wage purposes and the length of the reference period. All those factors will play an important part in determining the exact nature of the records that employers must keep. We believe in consultation and that is why the views of the business community have a key role before specific regulations are decided.
Clause 9, in conjunction with clause 49 which allows for regulations to make different provision for different cases, provides such flexibility. The amendment, on the other hand, is too prescriptive and ought to be rejected.
Amendments Nos. 63 to 65 relate to offences in relation to record keeping and more generally. I said in Committee and again in the House that clause 29, which covers offences, closely follows earlier legislation. As I said in Committee, the Government are not breaking new ground and we are content with the way in which the clause is framed.
Amendment No. 63 would affect subsection (2) of clause 29—the offences clause—which deals with the failure to keep or preserve any record in accordance with the regulations made under clause 9. The amendment would weaken the clause by adding the words, "without good reason". That would allow an employer to rely on having a good reason for failing to comply.
As I said in Committee, we do not expect substantial numbers of criminal prosecutions. However, when there are prosecutions, it will be necessary to prosecute effectively. The hon. Member for Daventry (Mr. Boswell) recognised that. To have good law, enforcement provisions must be as effective as possible. The amendment would change the nature of the offence, making successful prosecution more difficult, because it would be necessary to show that there was no good reason for the breach.
5 am
The amendment would also be inconsistent with earlier legislative treatment of the failure to keep records, which did not allow good reason as a ground for failure to comply. Again, I am referring to section 19(4) of the Wages Act 1986. I made a great deal of reference to that Act in Committee. It does not take a genius to remember that it was enacted under a previous Conservative Administration. I did not notice any great outcry about the criminal sanctions in it.
The provisions in clause 46(4) already provide an employer with a defence in terms of his duty to keep records. If he can prove that he exercised all due diligence and took all reasonable precautions to ensure that he and any person under his control complied with the provisions of the Bill and any regulations made under it, he has a defence against a charge under clause 29(2).
Amendment No. 64 appears to go in the opposite direction from amendment No. 63, making the clause harsher. That would be a great problem for enforcement. It appears to strengthen the clause by adding a provision explicitly covering a person who knowingly fails to disclose any record or information that he knows to be relevant. It would, however, go beyond the equivalent


provision in the Wages Act 1986—section 21(1)—on which clause 29(4) is modelled. The Conservatives enacted and supported those measures when in government. We have modelled our provisions on the same legislation, but the Conservatives still object that we are breaking new ground on such offences. Nothing could be further from the truth. The amendment is unnecessary and I ask the House to reject it.
Amendment No. 65 would require the officer investigating a case to be satisfied that all reasonable steps had been taken, by civil proceedings, to satisfy the interests of the worker or workers before proceedings were commenced for any of the offences in clause 29. Under our proposals, criminal proceedings would be a last resort. However, failure to pay the minimum wage is not the only criminal offence. It makes no sense to insist on going through civil procedures for some of the other offences.
We have demonstrated a flexible approach. There are criminal sanctions, but they are a last resort. I ask the House to reject the amendments if they are pursued.

Mr. Chidgey: I have listened to the Minister's arguments; I am very pleased that she has taken seriously the points that I raised and that I will have an opportunity to discuss them with her. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 11

POWERS OF OFFICERS

Mrs. Roche: I beg to move amendment No. 13, in page 8, line 41, at end insert
'(as in force when the award is made)'.

Mr. Deputy Speaker: With this, it will be convenient to discuss Government amendments Nos. 14 to 19.

Mrs. Roche: The amendments remove a number of possible ambiguities from the clauses dealing with enforcement and the right to appeal. I shall deal with the most straightforward first. Amendments Nos. 13 and 17 ensure that it is absolutely clear which national minimum wage rate is to be used for calculating the amount of the penalty. Amendment No. 13, which amends clause 11, refers to the award for failure to allow access to records. Amendment No. 17, which amends clause 19, refers to the financial penalty for non-compliance with an enforcement notice.
In both cases, we want to make it clear that the relevant national minimum wage rate is the rate in force when the award is made. That avoids any difficulties that could arise if the national minimum wage rate were changed while a complaint was being pursued. It is a small, technical change, but one which we believe is necessary to avoid ambiguity.
Amendment No. 14 deals with enforcement notices relating to groups of workers. It ensures that enforcement notices can be framed so that they apply to a whole group of workers by description.
Amendments Nos. 15 and 18 and the consequential amendments address an issue that was raised in Committee. We had an important debate on whether the enforcement officer's opinion or objective facts should be considered when establishing grounds for a successful appeal in clauses 17 and 20. As currently drafted, there is a possibility, however small, that the clauses could be interpreted as equating the enforcement officer's opinion—we had extensive debate on this—that there were grounds for serving the notice with the factual state of affairs. That is, of course, not the Government's intention.
I clearly pointed out in Committee that an officer, like any public servant, will act reasonably by definition. The officer's opinion must therefore be based on fact. The hon. Members for Daventry (Mr. Boswell) and—if my memory serves me right—for Runnymede and Weybridge (Mr. Hammond) will be particularly pleased to note that the amendments remove any possibility of doubt on that score. It is the facts which count. I hope that this is a good example of the Government listening to the debate in Committee.
Amendment No. 15 also clarifies the position in relation to an appeal against a notice involving more than one worker. Paragraph (a) deals with a situation where a notice is wholly wrong, and paragraph (b) deals with a situation where a notice rightly relates to some workers, but wrongly relates to others. In conjunction with subsection (8), as amended, that allows a tribunal to rectify such a notice by eliminating all references to the wrongly included workers.
The group of amendments is very much in the nature of good housekeeping. They are in order to remove any possible ambiguity, however small. They are a very good illustration of how, as my hon. Friend the Minister of State says, the Government are determined to get the Bill right. I commend them to the House.

Amendment agreed to.

Clause 15

NON-COMPLIANCE: WORKER ENTITLED TO ADDITIONAL REMUNERATION

Mr. Bercow: I beg to move amendment No. 41, in page 11, line 18, at end insert—
'plus two per cent above the prevailing Bank of England base rate.'.

Mr. Deputy Speaker: With this, it will be convenient to discuss amendment No. 68, in page 11, line 21, at end add—
'(4) The entitlement to additional remuneration referred to in subsection (1) above shall be limited to an amount as described in subsection (2) above which relates to a period of 12 months immediately preceding the service of a notice under section 17 of this Act or the initiation of civil proceedings for breach of contract in respect of the alleged underpayment.'.

Mr. Bercow: The purpose of clause 15, which the amendment tabled in my name and that of my hon. Friend the Member for Daventry (Mr. Boswell) is designed to amend, is to secure additional remuneration for employees who are deprived of the payment to which they are entitled.
As far as I am aware, none of my hon. Friends has any objection to clause 15. I certainly have no objection to it in so far as it is designed to improve the remuneration of workers. My problem with clause 15, as the Minister of State will recall from our discussions in Committee six weeks ago, is that I do not feel that it adequately secures that objective.
There is no inconsistency in opposing the principle of the minimum wage and believing that, when that national minimum wage is on the statute book, people should receive it, and that, if they do not receive it, they should secure recompense as a result. I do not want there to be a law on the statute book that is, wilfully or otherwise, disregarded by a minority of employers, for which disregard employees are unable to secure redress.
The Government have said until now, in clause 15, that employees should be entitled to the difference between the payment that they did receive and the payment that they should have received in any given pay reference period. It is not accurate in any real sense to describe that differential payment as additional remuneration for the employee. I am not quibbling with the Minister about his good intent, but I genuinely believe that it does not constitute additional remuneration.
The difference between what the employee did receive and what he should have received cannot in any reasonable sense be considered to be additional remuneration. It is simply the remuneration under the terms of the Bill, soon to be the Act, to which the employee is entitled. That is not additional remuneration. Additional remuneration would be something over and above that difference, and something that reflected the period of non-payment that the employee had suffered.
I raised that point in Committee, as the Minister of State will recall, on 27 January 1998 at columns 493 to 496. Fittingly, it is exactly six weeks since that debate took place. On that occasion, I think supported by a number of my hon. Friends, I argued for the payment of compensation for, or interest on, unpaid wages to employees. In response to the points that I made, the Minister of State graciously observed—I am sure that he will not object to me quoting:
The hon. Member for Buckingham raised an interesting point that is worthy of consideration".
He then said:
I shall consider the matter, and I shall ensure that a copy of Hansard containing this morning's debate goes to the Low Pay Commission. Okay?"—[Official Report, Standing Committee D, 27 January 1998; c. 496.]
I readily accepted that response as being sincere and as offering some hope that, in one form or another, the spirit of my observations might be taken on board by the Government.
I have not given up hope that the spirit of my observations will be taken on board by the Government. I am not here to cavil but to inquire, to make the arguments and to listen with interest and respect to the Minister's response. The spirit, and possibly the detail, of amendment No. 41 should be able to unite hon. Members on both sides of the Chamber. I invite hon. Members who will disagree violently with me and with my right hon. and hon. Friends on other aspects of the Bill, to consider the issue on its merits, and to ask themselves whether the

argument for the payment of interest on an unpaid wage is valid in principle, and therefore whether they might consider giving effect to it in practice.
The arguments are compelling. The first argument is that the employee is entitled to a wage. If an employer does not pay that wage, either accidentally or deliberately, that employer is depriving an employee of an entitlement—an entitlement which the Labour party is determined to embody in law. So wilfully to ignore the fact of non-payment and not to do anything about it would be out of kilter with the Government's thinking and principles on the subject. That is the first argument—a moral one.
The second argument is lesser, but nevertheless, I hope, a valid consideration. It is a practical point and it is that an employee who is not paid the national minimum wage to which he or she is entitled might as a consequence of that period of non-payment suffer real financial hardship or disadvantage. For the period for which he or she is not paid the national minimum wage, the employee might suffer serious cash flow problems. It is unlikely that any cash flow problems that the employer is suffering are in any way comparable to that disadvantage. So, a practical disadvantage is being suffered, quite apart from the moral argument in support of the employee being paid fully at the outset rather than later.
5.15 am
The third argument in support of the principle of the amendment is that the Government accept—and are right to do so—the principle that an employer who does not adhere to his obligations under the terms of the Bill when it is enacted could be subject to penalty. I shall be subject to your strictures, Mr. Deputy Speaker, if I stray to any degree from the terms of the amendment and I do not do so. I am referring to clause 19, to illustrate the validity of my argument in support of amendment No. 41.
As the Minister of State will know—I imagine that he knows the Bill backwards by now and has eaten it over the breakfast table on several occasions—clause 19 provides for the service of a penalty notice in circumstances in which an enforcement notice has been ignored or in which an employer has failed to comply with such a notice. If I remember rightly, under clause 19(3) provision is made for that penalty to be charged at twice the hourly rate of the national minimum wage for each day that the employer does not comply with the requirements of the legislation.
I think that the Minister will recollect that I did not complain about that provision. If anything, I made favourable reference to it. It did not seem unreasonable. If there is to be an enforcement procedure and a penalty notice, the penalty has to sting and to stick, otherwise it has no purpose or deterrent effect. If the Government accept the principle of service of penalty and of the entitlement to extract the penalty from a non-compliant employer, why do they not accept—I hope that they will—that that principle should apply in this context too?
My anxiety is this. In the context of clause 19, the penalty extracted from the non-compliant, rogue employer is a penalty that will go to the Secretary of State—it will swell the coffers of the Treasury. That may be appropriate, but surely when an employee suffers disadvantage because an employer does not honour his


legal right to the national minimum wage, it is appropriate that the employee should have the right to claim compensation or interest on the unpaid sum.
I have made the modest suggestion that the additional payment that the employee should receive in those circumstances should be a rate of interest on the unpaid sum two percentage points above the then prevailing Bank of England base rate. If memory serves me correctly, that would currently be a percentage rate of 9.25 per cent. For the practical elucidation of the argument for right hon. and hon. Members, what that means can be simply stated. If the employee is owed unpaid wages of £100 when that non-payment is discovered and the employer is required by this legislation to honour the debt, given the inconvenience and suffering that the employee has suffered in the interim, instead of being £100 it will be £109.25. That seems perfectly reasonable.
Moreover, I would go so far as to argue that there should, in this context, be no distinction between a deliberate and an accidental non-payment. Not all my hon. Friends will agree, but I argue that because, whether or not the failing is deliberate or accidental does not affect the disadvantage that the employee has suffered, and, regardless of whose fault it is, it is almost certainly not the employee's fault.
If the employee has suffered the detriment of non-payment and has not enjoyed his or her entitlement under the Bill, he or she should receive not only the payment that was due, but compensation. That is fair and financially helpful to the employee. I suggest that it would act as a deterrent to that tiny minority of employers—I stress that it is a tiny minority—who fail, either wilfully or through neglect, to honour their obligations.
My suggestion is reasonable. When an employee is deprived of his wages, that is analogous to a commercial debt. If Labour Members believe, as I know that many do, in a statutory right of interest on commercial debts—I venture no particular view on the merits of that argument—it should follow that they favour the payment of interest or compensation on the debt that I have described. If not, they will be arguing that a debt that is owed by one company to another merits the payment of interest, whereas the debt that is owed by an employer to an employee does not. I am sure that Labour Members will recognise that that issue is worthy of consideration.
I rest the case. I am not fanatical about whether the particular terms of the amendment are followed, but I passionately believe that, if the right exists in law, it should be honoured and be seen to be honoured. I suggest that the Bill would be fairer, more just and better received if the Minister sympathetically considered the amendment that my hon. Friend the Member for Daventry and I tabled.

Mr. Ian McCartney: I welcome the hon. Gentleman to the Dispatch Box. I well remember the first time that I spoke at the Dispatch Box and I know that it can be nerve-racking, although, to be fair, he did not show any nerves in making his proposition. I hope that he will represent his party at the Dispatch Box on many future occasions—it seems to have improved his temper, although my temper seems to have become worse since I started to speak from the Front Bench.
The amendments concern workers' rights to recover an underpayment, but they have little else in common. Amendment No. 41 is well intentioned, and I welcome it in that spirit. It would give the worker the right not only to any additional remuneration over the relevant period—which is defined as the difference between what was paid and the national minimum wage—but to the interest on that amount. That seems to be a reasonable proposition—as the hon. Member for Buckingham (Mr. Bercow) pointed out, when the general concept was put to me in Committee, I agreed that it was worthy of further consideration.
The idea has a number of problems, however. The worker's entitlement to recover an underpayment is not a new feature of employment law. The Bill uses existing remedies. First, the worker can make a claim in an industrial tribunal under the existing provisions on unauthorised deductions from wages in the Employment Rights Act 1996.
Secondly, when an employee's employment ends, he can claim for past underpayments of the national minimum wage in an industrial tribunal under the provisions of the Industrial Tribunals Act 1996, which enable tribunals to hear ordinary breach of contract claims. Thirdly, he can bring a claim for breach of contract in the ordinary civil courts.
The recovery of underpayments of the national minimum wage simply follows those accepted precedents. If a worker makes a claim to an industrial tribunal, he is entitled to the outstanding sum owed, but not to any interest, but if he makes a claim in the ordinary civil courts, he will be entitled to interest.
That is undeniably an inconsistency, but it is not easy to resolve. In general, no interest going back to the date of the wrong done is claimable in an industrial tribunal, even when the award represents a debt owed to the worker; but to entitle workers to interest only in respect of national minimum wage claims would produce a different set of inconsistencies. Workers recovering other underpayments in breach of contract in industrial tribunals would not be entitled to interest, and those recovering an underpayment, partly in breach of the national minimum wage provisions and partly not, would be able to obtain interest only on the proportion that was in breach of the provisions.
I am sympathetic to the amendment, but it raises complicated problems. With great reluctance, I have concluded that it is not feasible at this stage to entitle workers who claim in industrial tribunals to interest on national minimum wage claims alone. I therefore ask the House to reject the amendment if it is not withdrawn.
For most workers on very low wages, the vital thing is to get the cash that they are owed as soon as possible. Interest is likely to be very much a secondary consideration. Industrial tribunals may not offer interest, but they offer an approachable and speedy procedure. The idea behind the amendment is reasonable, but I am convinced that getting the money to the worker as soon as possible is the most important consideration.
Amendment No. 68 is a different kettle of fish. It would restrict the period over which a worker is entitled to claim back any underpayment. Under the Bill, if a worker suspects that he is being paid less than his minimum wage entitlement, he can start civil proceedings to reclaim his money through an industrial tribunal or a civil court, or an officer may serve a notice on his behalf.
In an industrial tribunal's proceedings on unauthorised deductions from wages, there are no limits on how far back claims may reach, provided that the claim itself is timely—that is, it is made within three months of the last of a series of underpayments. In county court proceedings for breach of contract, the claim can go back a maximum of six years before the proceedings were brought.
Amendment No. 68 would change all that. A worker who had been paid below the minimum wage would be able to claim money back only for the year before the proceedings were started. Any underpayment from before that would not be recoverable. That would apply regardless of whether the proceedings were brought in a tribunal or in the ordinary courts.
Amendment No. 41 is fair-minded, but there can be little to recommend amendment No. 68, which is simply unjust. Why should an employer who gets away with underpayment for years and years have to pay back only what he owes the worker for the last year? Is that a reward for the employer who can keep things quiet for as long as possible before finally being brought to justice?
For different reasons, I urge the House to reject both the amendments.

Mr. Bercow: I am extremely grateful to the Minister for his kind remarks, which are warmly appreciated. I am also grateful for the spirit in which he responded to my specific remarks in support of amendment No. 41.I acknowledge the practical difficulties, but I still believe that there is a powerful argument in principle for the incorporation of the amendment or something similar. If that is not possible on this occasion, I hope that we may revisit the subject in the future.
I am conscious of the hour and of the other important business that remains to be transacted, so I shall not detain the House. I therefore beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 17

POWER OF OFFICER TO ISSUE ENFORCEMENT NOTICE

Amendments made: No. 14, in page 12, line 12, at end insert
'(and, where it does so, may be so framed as to relate to workers specified in the notice or to workers of a description so specified)'.
No. 15, in page 12, line 17, leave out subsection (6) and insert—
'(6) On an appeal under subsection (4) above, the employment tribunal shall dismiss the appeal unless it is established—

(a) that, in the case of the worker or workers to whom the enforcement notice relates, the facts are such that an officer who was aware of them would have had no reason to serve any enforcement notice on the appellant; or
(b) where the enforcement notice relates to two or more workers, that the facts are such that an officer who was aware of them would have had no reason to include some of the workers in any enforcement notice served on the appellant; or
(c) where the enforcement notice imposes a requirement under subsection (2) above in relation to a worker,—

(i) that no sum was due to the worker under section 15 above; or
(ii) that the amount specified in the notice as the sum due to the worker under that section is incorrect;


and in this subsection any reference to a worker includes a reference to a person whom the enforcement notice purports to treat as a worker.'.

No. 16, in page 12, line 27, after `(b)' insert 'or (c)'.—[Mr. Ian McCartney.]

Clause 19

FINANCIAL PENALTY FOR NON-COMPLIANCE

Amendment made: No. 17, in page 13, line 18, after 'wage' insert
'(as in force at the date of the penalty notice)'.—[Mr.Ian McCartney.]

Clause 20

APPEALS AGAINST PENALTY NOTICES

Amendments made: No. 18, in page 14, line 7, leave out subsection (3) and insert—
'(3) On an appeal under subsection (1) above, the employment tribunal shall dismiss the appeal unless it is shown—

(a) that, in the case of each of the allegations of failure to comply with the enforcement notice, the facts are such that an officer who was aware of them would have had no reason to serve any penalty notice on the appellant; or
(b) that the penalty notice is incorrect in some of the particulars which affect the amount of the financial penalty; or
(c) that the calculation of the amount of the financial penalty is incorrect;

and for the purposes of any appeal relating to a penalty notice, the enforcement notice in question shall (subject to rescission or rectification on any appeal brought under section 17 above) be taken to be correct.'.

No. 19, in page 14, line 15, after '(b)' insert 'or (c)'.—[Mr. Ian McCartney.]

Clause 21

THE RIGHT NOT TO SUFFER DETRIMENT

Mr. Ian McCartney: I beg to move amendment No. 5, in page 14, line 37, at end insert
'or
(c) the worker qualifies, or will qualify, for the national minimum wage or for a particular rate of national minimum wage.'.

Mr. Deputy Speaker (Sir Alan Haselhurst): With this, it will be convenient to take Government amendments Nos. 6 to 8, 24, 25, 9, 10, 26, 11, 35 and 12.

Mr. McCartney: The substantial amendments in this group are Government amendments Nos. 6 to 12 and 35, which ensure that it will not be possible for an employer to dismiss an employee who is not yet eligible for the national minimum wage but is soon to become so because of their age. That is the general purpose, but before I go any further I must make one point clear from the outset—no decision has yet been taken on whether there will be any exemptions or different rates using the powers in clauses 3 and 4.
The Low Pay Commission has been asked to consider the matter. It will be report in May on whether, and if so how, the powers in the Bill should be used. I say that now


to spare Conservative Members' leaping to their feet to claim that the amendments presuppose any decisions on that. They do not. They are just in case, and I shall explain why they are so important. If—and I stress if—different rates are set for some young workers, below the rate of the full national minimum wage, some unscrupulous employers might consider sacking the young workers the day before they reach their entitlement to the full rate, or to a higher rate. I do not wish to imply that that would happen frequently—I am fully aware that the vast majority of employers are responsible and behave ethically—but we know from bitter experience that some employers will resort to such tactics, and the amendments would stop them.
The amendments have two further, related, effects. They cover a situation in which a worker might suffer because he has already reached an entitlement to the national minimum wage, or an entitlement to a higher rate, as well as when he is about to do so. They also provide protection for a worker if there is a general uprating or change to the rates which could lead to an employer taking action against a worker.
The amendments are all related and work in the following way. Government amendments Nos. 5 and 6 relate to clause 21. They extend the protection of all workers from detrimental action to include those who are not at present eligible for the national minimum wage, but who will become eligible in the future. Without the amendments, there would be nothing to stop an employer taking action against a worker, such as terminating the contract of a worker who is not an employee on the ground that the worker is soon to be eligible for a higher minimum rate.
Government amendments Nos. 7 and 8 make the equivalent changes to clause 23, and Government amendments Nos. 9 and 10 make the equivalent changes to clause 24 for Northern Ireland. Those clauses protect employees from unfair dismissal. Hon. Members will appreciate that workers who are not employees do not have the relevant contractual arrangement and cannot therefore be dismissed—they will use the protection from detriment in clause 21. The amendments extend the scope of the clauses, making a dismissal unfair if the reason for it is that the employee would become entitled to the full national minimum wage or to a higher rate.
Government amendments Nos. 11 and 12 apply the protection to agricultural workers under the agricultural wages regime. They amend the Agricultural Wages Act 1948, the Agricultural Wages (Scotland) Act 1949, and the Agricultural Wages (Regulation) (Northern Ireland) Order 1977. The amendments extend the meaning, in the Employment Rights Act 1996, of any reference to a person qualifying for the national minimum wage so that it includes reference to a person who has become, or will become, entitled to a minimum rate under the agricultural legislation mentioned. That is done by adding to the enforcement provisions in that legislation.
I ask the House to support the amendments, which add an extra element of protection and improve the Bill as a result.

Mr. Ian Bruce: When the national minimum wage is introduced, some workers will be paid less than the rate at which it is set. Will an employer be liable to prosecution if he claims that he can afford to pay fewer workers and, before the introduction of the national minimum wage, downsizes his company?

Mr. McCartney: I have made the response to that point clear. It would be unfair dismissal to sack someone for claiming the right to the national minimum wage. A worker should also not suffer dismissal or other detriment for claiming that another worker is entitled to the national minimum wage. It would be unfair and a detriment for an employer to take action against his employees on the ground that they were seeking a right under the Bill. That has always been the position. We are moving the amendments to ensure that another detriment does not happen if the Low Pay Commission recommends and the Government accept different rates for younger workers. We want to ensure that when people reach entitlement to the minimum wage they are not sacked solely for claiming it.
As with all rights relating to unfair dismissal and to detriment, the courts will determine whether the worker has a case in the light of evidence presented to it from both sides. If a worker is dismissed for good reason, the employer has nothing to fear. To challenge the principle of protecting workers from dismissal on these grounds is to challenge the principle of the national minimum wage. We are back to the age-old and long-discredited argument that a minimum wage leads to huge lay-offs. That was the point made by the hon. Member for South Dorset (Mr. Bruce); Conservative Members have constantly claimed that a minimum wage will cost jobs.
We argue, and all the evidence suggests, that a minimum wage set at a sensible level taking account of economic circumstances will not lead to that scenario. We believe in a national minimum wage. Set at a sensible level, it will not cause difficult problems.

Mr. Hammond: What is a sensible level?

Mr. McCartney: The hon. Gentleman asks what is a sensible level. Is not the objective that we set the Low Pay Commission to make recommendations on such matters?

Mr. Hammond: Is a sensible level, as suggested by the financial memorandum to the Bill, one that will not affect at all the level of employment in the economy? If so, why did the Secretary of State not specifically give the Low Pay Commission the task of setting a level that would not affect employment at all?

Mr. McCartney: The commission was given a wide reference, including taking account of economic circumstances. It is made up of individuals with close investment in all sections of the labour market and with skills and knowledge of it. It has taken considerable evidence across the United Kingdom to come to its conclusions. Having been given that wide remit, it will produce recommendations on the rate and related matters. The hon. Gentleman will have to wait a few more weeks for them to be placed before the Government and the nation.
There can be no justification for dismissing workers only because they have become entitled to the minimum wage. That would be extremely short-sighted and wrong. The worker must be protected from such action.
Amendments Nos. 24 to 26 are tidying-up amendments. They do not change the Bill's intended meaning or effect. Amendment No. 24 relates to subsection (3) in the new section 104A that clause 23(1) inserts into the Employment Rights Act 1996, making the dismissal of an employee for asserting rights under the National Minimum Wage Bill automatically unfair in Great Britain.
The amended text makes it clear that the right to which section 104A applies is
any right conferred by or by virtue of any provision of the National Minimum Wage Act 1998.
The addition of the formulation "by virtue of reflects the Bill's extension to agricultural workers in Great Britain of automatic protection against unfair dismissal for asserting rights that those workers do not have directly under the Bill but which are given to them by virtue of the Bill.
Amendment No. 26 makes the same tidying-up change in relation to automatic protection against unfair dismissal for asserting rights conferred on agricultural workers in Northern Ireland by virtue of the Bill.
Amendment No. 25 is consequential on the Employment Rights (Dispute Resolution) Bill. As those who attended the many hours in Standing Committee D know, a great many Government amendments were tabled to bring the National Minimum Wage Bill into line with changes being made to the industrial tribunal system, soon to be known as the employment tribunal system, through that Bill. It is a Lords private Member's Bill with cross-party support. The amendments have not therefore been contentious.
Unfortunately, a further change is needed as a consequence of the Employment Rights (Dispute Resolution) Bill but we did not spot it in time to table it in Committee, for which I apologise. It relates to clause 23, which deals with protection from unfair dismissal. Subsection (5) inserted a new subsection into the Employment Rights Act 1996 ensuring that the right not to be dismissed for enforcing a right under the National Minimum Wage Bill will be one of those rights that applies regardless of whether a statutory dismissal procedures agreement applies to the employee. However, clause 12 of the Employment Rights (Dispute Resolution) Bill will make clause 23(5) of this Bill unnecessary because it amends the relevant section of the 1996 Act so that there will no longer be statutory exclusions for the dismissal procedures agreement and therefore no need to specify that national minimum wage rights are outside those exclusions. The situation will depend on whether the dismissal procedures agreement itself excludes dismissals of a particular description.
I hope that I have been able to set out in some detail, albeit without spending too much time on them, the reasons for the amendments. I also hope that hon. Members on both sides of the House will recognise the need to ensure that, where unscrupulous action is taken, the Bill protects employees claiming the right to the national minimum wage.

Mr. Boswell: First, I thank the Minister for his lucid and concise explanation of this large and complex group

of amendments. I shall not trade numbers with him, because it is important that the Bill be got right; nor would I wish to signal from these Benches any departure from the principle of good employment that he has set out. I can understand where he is getting to—indeed, I am slightly surprised that he did not get there before—in requiring through the substantive amendments that employers should not sack people in contemplation of their qualifying for the national minimum wage.
The difficulty is that the Bill must operate in the real world, where not all employers are as scrupulous as the Minister and I would like and where many, whether scrupulous or not, will be facing undoubted economic pressure. I make no predictions about whether there will be a separate rate for young persons, but it should be noted that employers may be tempted to find ways to cut the costs of their labour force and may not wish to employ workers at the full rate—at whatever age that happens to cut in. If employers are in difficulties, their recourse may well be not to employ such persons at all if there is any realistic risk of their eventually qualifying for the full rate. That is but another subset of the concerns that we have expressed extensively about the danger that, whatever rate is set, we may see a higher level of unemployment than might otherwise have happened. However, as the Minister has rightly said, that is a function of the rate that is likely to be chosen.
I have one specific issue on which I should like to probe the Minister. It concerns employees below a qualifying age who may eventually reach a qualifying age for the national minimum wage—I do not anticipate whether there is to be a youth rate—and whose contracts of employment are for a fixed term. As I understand employment law on unfair dismissal, if an employee is employed for a fixed term and that employment is not renewed at the end of the fixed term, that would not normally give rise to a claim for unfair dismissal unless there had been a specific agreement between employer and employee during the contract or, more typically, at the beginning of the contract, that that particular term should be disapplied. Will the Minister confirm, either now or later, whether fixed-term contracts that are keyed to an expiry date just before the qualifying date for the national minimum wage and accompanied by an agreement between employer and employee not to apply the unfair dismissal procedures would be allowed? That is a small point, but an important one in terms of the tidiness of the Bill.

Mr. McCartney: I thank the hon. Gentleman for the way in which he has responded. The issue he raises is technical, albeit one worth making. A range of issues surround what constitutes a contract, short term or otherwise. The arrangement in the Bill is an attempt to ensure that, where there is consistency of employment, that consistency is not disturbed solely on the ground of an employee reaching an entitlement to a national minimum wage. However, in the same spirit as the hon. Gentleman raises the matter, I undertake to write to him with a detailed legal explanation of the point he raises.

Amendment agreed to.

Amendment made: No. 6, in page 14, line 38, after 'of' insert
'paragraph (a) or (b) of'.—[Mr. Ian McCartney.]

Clause 23

RIGHT OF EMPLOYEE NOT TO BE UNFAIRLY DISMISSED: GREAT BRITAIN

Amendments made: No. 7, in page 16, line 26, at end insert
'or
(c) the employee qualifies, or will qualify, for the national minimum wage or for a particular rate of national minimum wage.'.

No. 8, in page 16, line 27, after 'of' insert
'paragraph (a) or (b) of'.

No. 24, in page 16, line 36, after 'by' insert
'or by virtue of, any provision of'.

No. 25, in page 17, line 15, leave out subsection (5).—[Mr. Ian McCartney.]

Clause 24

RIGHT OF EMPLOYEE NOT TO BE UNFAIRLY DISMISSED: NORTHERN IRELAND

Amendments made: No. 9, in page 17, line 35, at end insert
'or
(c) the employee qualifies, or will qualify, for the national minimum wage or for a particular rate of national minimum wage.'.

No. 10, in page 17, line 36, after 'of' insert
'sub—paragraph (a) or (b) of'.

No. 26, in page 17, line 43, after 'by' insert
'or by virtue of, any provision of' —.[Mr. Ian McCartney.]

Clause 26

REVERSAL OF BURDEN OF PROOF

Mr. Lansley: I beg to move amendment No. 45, in page 19, line 1, leave out 'any question arises' and insert
'an officer acting for the purposes of this Act makes a declaration, acting on the basis of his enquiries'.

Mr. Deputy Speaker: With this, it will be convenient to discuss the following amendments: No. 46, in page 19, line 17, after 'amount', insert
'to the extent that this is asserted in a declaration made by an officer acting for the purposes of this Act'.
No. 47, in page 19, line 23, leave out
'unless the contrary is established'
and insert
'if and to the extent that a declaration is made to this effect by an officer acting for the purposes of this Act'.

Mr. Lansley: I suspect that I have been invited to move the amendment in order to see what impact it has on my temper. In Committee, some of the Government's proposals on the reversal of the burden of proof tested Conservative Members' tempers considerably. We are not attempting to re-run that debate. The clause relates to civil and not criminal proceedings. There is, none the less, a well-established principle of the burden of proof falling on the plaintiff and of relative even-handedness in civil proceedings. To move away from that is undesirable.
The clause deals not only with proceedings brought under this legislation but with any civil proceedings in which it is asserted that the national minimum wage has not been paid or that someone qualifies for the national minimum wage.
Why have the Government gone down that path? They were quite clear in the notes on clauses, which said
that those remunerated at a rate below the national minimum wage can more easily succeed in claims.
There we have it. The Government have abandoned the principle of even-handedness in civil proceedings for efficiency reasons rather than for reasons of justice. The purpose of the amendments is to marry efficiency with justice.
The three amendments correspond to the three limbs of clause 26. Subsection (1) concerns the question whether a person qualifies for the national minimum wage; subsection (2) deals with deductions from wages; and subsection (3) deals with claims for additional remuneration, being the difference between the amount required to be paid in line with the national minimum wage and the amount that it is asserted was actually paid.
The structure of each subsection is the same. A presumption is made that the person qualifies, or that a deduction was made at below the minimum wage rate, or that a person was inadequately remunerated. That presumption stands unless the contrary position is established.
In Committee, the Minister was at pains to say that most employers will keep records, and will therefore have no difficulty in establishing whether the national minimum wage has been paid. I accept that. Similarly, in the great majority of cases, the question whether a person qualifies for the minimum wage, which is a legal issue, will be subject to arguments, and a prior presumption will not necessarily be the most significant factor.
However, in each case there will be difficult exceptions, and it is exceptions that make hard cases. Records may be lost, the nature of a contract may be disputed by the parties, and the value of benefits provided to an employee or a worker may be disputed. In those cases, why should there be a presumption in favour of the plaintiff rather than the defendant? In Committee, the Opposition tabled amendments designed to remove the reversal of the burden of proof and to restore neutrality. We may have won the argument, but we lost the vote.
The Minister was adamant that the information at issue in such disputes is in the hands of the employer, and that the employer must meet the tests. The Minister's intention was to level the playing field between employer and employee. He asserts that the worker requires the benefit of the presumption to achieve that. The amendments take account of that debate, and they demonstrate that we can achieve the objective more justly and equitably.
The worker is not on his own, impotent against a rogue employer, because he has the benefit of the enforcement mechanism that was set out in earlier clauses. The officer who is appointed by the Secretary of State can acquire by law all the employer's records. The amendments are designed to confine the exercise of the controversial presumption to being pursuant to the decision of that officer. That has the benefit of removing the difficulty of vexatious litigation by discontented employees who seek to exploit accidental or inadvertent lack of records or who


use the scope of dispute over eligibility or levels of remuneration for their own purposes. The amendments would also serve to prevent the presumption of guilt by an employer from being transported into civil proceedings outside the purposes of the legislation, and would have the further benefit of enabling the officer in question to assist the court in arriving at a presumption about the extent of the additional remuneration that was payable. That is not otherwise defined in clause 26.
In its further views on the Bill on Report, the CBI expresses its reservations in principle about the reversal of the burden of proof. It echoes my point about the relative simplicity of arriving at some decisions. However, the CBI argues that, where arguments are less clear, its members are resolutely opposed to the reversal of the burden of proof.
Although the amendments do not restore the neutrality that the principles of natural justice might otherwise demand, they substantially circumscribe the circumstances in which the burden of proof is reversed. Reversal would apply only where a duly appointed officer had conducted inquiries, and it would be subject to challenge on the basis of the reasonableness of such a conclusion. The Minister made it clear that the officer acting on behalf of the Secretary of State would be subject to such a test of reasonableness, and there is benefit in that. The scope of the presumption against an employer would be limited and properly accountable. One hopes that the presumption against the employer would not be used arbitrarily.
The amendments have been tabled in good faith in an attempt to respond to the debate in Committee. We respect the principle of even-handedness in civil proceedings and the amendments give to the employee every opportunity, through the use of an officer appointed by the Secretary of State, to have the presumption that the Minister seeks used in their favour but in accountable circumstances. I hope that my hon. Friends will support the amendments and that the Minister will accept them.

Mr. Ian McCartney: It is a pleasure to welcome the hon. Member for South Cambridgeshire (Mr. Lansley) to the Opposition Front Bench. He said he thought it had to do with his temper, but I beg to differ. Those of us who took part in the record Committee sitting remember that the hon. Gentleman went missing for some hours. A week later we found out from his local press that he had gone for an early bath. Perhaps the hon. Member for Daventry (Mr. Boswell) has kept him here tonight by putting him on the Front Bench. I had a bet with a close colleague that the hon. Gentleman would be on the Opposition Front Bench by the end of this Session. I shall share the winnings with him, although I cannot yet say whether the sum is equivalent to the national minimum wage. I wish the hon. Gentleman and the hon. Member for Buckingham (Mr. Bercow) well in future debates.
I again remind the House how clause 26 works. It reverses the burden of proof in three important situations. It is important to state the principle involved. The Government fought long and hard on this issue, as the overwhelming majority of people who will benefit from the minimum wage are in a weak position in terms of the employer-employee relationship. The overwhelming majority of them do not have information at their disposal as to whether a payment was received or whether it was appropriate. It was therefore crucial that

we introduced proposals to ensure that employees in those circumstances were able with certainty to claim the minimum wage when it does apply.
First, clause 26 says that, if there is a question over whether an individual qualifies for the national minimum wage—whether he is a worker, as defined by the Bill—the presumption is that he does qualify. It will be for the alleged employer to prove that he does not. Again, that is particularly important because, for years, attempts have been made, through, for example, bogus self-employment, to prevent vulnerable employees from claiming their personal rights in the workplace.
Secondly, the clause says that, when a worker complains to an industrial tribunal for the recovery of a clause 15 underpayment, the tribunal will assume that the worker was indeed paid below the minimum wage, unless the employer can prove otherwise. It will be for the employer to prove that he did pay his worker the national minimum wage.
Again, that is important because all the information that is necessary to determine whether the employer did in fact pay appropriate wages lies with the employer. He maintains records. He has responsibility for records, national insurance contributions, the pay-as-you-earn scheme and all the other information that is needed to determine whether an appropriate wage has been paid. Good record keeping and maintenance are an absolute defence against any unfair allegation that a minimum wage was not paid when it was. That is not an onerous task.
Thirdly, clause 26 says that, if a worker goes to a civil court to claim back a clause 15 underpayment in a contract claim, it will again be for the employer to prove that he paid his worker the national minimum wage. It will be presumed that the worker was paid below the minimum unless it can be proved otherwise. Again, that is in place for the reasons that I gave earlier. Clause 26 does not reverse the burden of proof as to the amount of the underpayment. It will still be for the worker to establish that.
The three amendments relate to each of the circumstances where clause 26 reverses the usual burden of proof. In each case, they would mean that the burden of proof is reversed only if an enforcement officer is involved and makes a declaration relating to the worker's case. That would obviously undermine the whole purpose of clause 26. We have already made it clear that the reversal of the burden of proof is fundamental. It applies regardless of whether an enforcement officer is involved. It is there to protect the worker and we view it as one of the foundation stones for effective enforcement.
The clause relieves the individual from having to prove that he is entitled to the national minimum wage and that he has received less than that wage. If the employer wishes to assert that a person is not a worker, or that he is being paid the national minimum wage, it will be for the employer to prove it. The provision is deliberately designed to give the worker the benefit of any doubt as to the right of entitlement. It should remove grey areas behind which unscrupulous employers might otherwise hide, and make it more difficult for them to find loopholes through which to climb.
This is a deliberately strong measure and we will not allow it to be diluted. I urge the House to reject the amendments, if the hon. Member for South Cambridgeshire forces them to a vote.

Mr. Lansley: I am grateful to the Minister for his kind remarks and I am pleased if, in some small way, I have contributed to his net remuneration for performance on the Bill; the hours that he has put in on it must be reducing his hourly rate by the day. He may need the proceeds of his bet to take the rate up to the national minimum wage rate.
That said, I am disappointed by the way in which the Minister has responded to the debate. We have sought in the amendments to go a considerable way towards accepting the Government's argument in Committee, but to leave a modicum of protection for employers against arbitrary use of the power on behalf of an employee. I did not find in the Minister's speech any convincing explanation of why the officer acting on behalf of the Secretary of State cannot provide all the protection that is required for employees against the sort of employer the Minister has described.
It is the Opposition's desire to examine in detail the amendments tabled on Report, so I will not delay our proceedings by pressing this amendment to a vote. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 29

OFFENCES

Amendment made: No. 27, in page 20, line 18, at end insert—
'(5A) Where the commission by any person of an offence under subsection (1) or (2) above is due to the act or default of some other person, that other person is also guilty of the offence.
(5B) A person may be charged with and convicted of an offence by virtue of subsection (5A) above whether or not proceedings are taken against any other person.
(5C) In any proceedings for an offence under subsection (1) or (2) above it shall be a defence for the person charged to prove that he exercised all due diligence and took all reasonable precautions to secure that the provisions of this Act, and of any relevant regulations made under it, were complied with by himself and by any person under his control.' —[Mrs.Roche.]

Clause 35

ARMED FORCES

6 am

Mr. Boswell: I beg to move amendment No. 66, in page 22, line 39, at end insert—
'(3) The Secretary of State shall take all reasonable steps to ensure parity of treatment between those persons serving as members of the naval, military and air forces of the Crown and their civilian equivalents, and shall lay before both Houses of Parliament a report explaining the reasons for any disparity of treatment with such civilians.'.
The Opposition have long argued that the armed forces should be exempt from the provisions in the Bill because it is extremely important to safeguard their operational efficiency and morale. We were pleased when the

Government did an about turn from their original intention and fell in behind us by agreeing to exempt the armed forces from any national minimum wage.
I am bound to say that the Government, in circumstances of some embarrassment to them—which I will not dilate on now—did not give a clear explanation for their decision. We drew our own conclusion, which was that the Minister had been outgunned by other members of the Government—but we do not want to rub that in. He said that the Armed Forces Pay Review Body might provide a satisfactory proxy to take account of the interests of armed forces personnel in respect of the national minimum wage, and it is certainly the best sort of proxy that the Government are likely to achieve. It is in that spirit that we tabled this amendment.
The amendment states:
The Secretary of State shall take all reasonable steps to ensure parity of treatment between those persons serving as members of the…forces of the Crown and their civilian equivalents".
Hon. Members who served in Committee will remember that when we discussed this matter, I made two related but slightly separate points. One related to the normal peacetime position, when clearly it should be possible, through the pay review mechanism, to achieve a degree of parity; and the second to the special conditions of wartime, when that parity might not be applicable. Civilians could be serving alongside service personnel, with one group being able to qualify for the national minimum wage—however many hours it was defined that they were working operationally—but the other, the service personnel, not qualifying for that.
The underlying motive for the Government's difficulties relates, for example, to the hours of a working private who is paid about £28 a day, but that is stretched over a 20-hour day on exercises. That results in a very low hourly rate. Of course, that is not what he is always paid, but it shows the sort of problem that would arise if the Bill applied to the armed forces.
We accept that the Armed Forces Pay Review Body is probably the best proxy now that the Government are exempting the armed forces from the Bill. We want to enforce that through the amendment, which states:
The Secretary of State shall take all reasonable steps to ensure parity".
Our reason for using that formulation—or even raising the matter at all—is, as much as anything else, as the Minister knows, that it is a propensity of Governments—as this Government have done and, as I admit, the previous Government did when there was not a national minimum wage—to phase in awards from the various pay review bodies, and particularly, in this case, from the Armed Forces Pay Review Body.
I want to use the line of argument followed by my hon. Friend the Member for Buckingham (Mr. Bercow) about delayed payment of entitlements under the national minimum wage. If an award is phased, the sum is not paid in full and, in any case, there is a loss that is not recovered. Therefore, if the Government decide, as they have this year, to defer until later in the year part of the increase—in round terms, roughly one half; the increase varies between ranks—for service personnel of whatever rank, parity will be lost because of the Government's interference in the process, regardless of whether it had been achieved by the pay review body.
I acknowledge—as I acknowledge the interests of the previous Government in the matter—that there may well be interests of Government that require suspension of exact parity. Those circumstances bring me to the second part of our amendment, which would provide that, in cases in which parity was not adequately or fully secured, the Secretary of State
shall lay before both Houses of Parliament a report explaining the reasons for any disparity of treatment with such civilians.
That seems to be an entirely reasonable provision. We are not saying that the Secretary of State cannot suspend parity, but that, if Ministers choose to do so, they must come to the House to justify their choice. They should be able to do so, and—if it is appropriate—to convince the House that it should be so.
We are, therefore, interested in fairness for service personnel—as I am sure that the Minister is. We want to establish a mechanism that is as fair as can possibly be achieved. We want also to provide some operational flexibility for the Secretary of State in implementing the parity commitment. We have framed and moved amendment No. 66 in that spirit.

Mr. Gerald Howarth: Clause 35 seems to blow a hole in the Government's case, as Ministers have acknowledged in it that they are not prepared to give parity to their own employees. Crown employees are to be given the benefit—I use the word carefully—of the measure, whereas those who serve in the forces are to be denied that "benefit". It is rather extraordinary that the Government are not prepared to accept amendment No. 66.
I am not quite sure of the latest pay figures for the armed forces, but the most recent ones that I have been able to secure show that an army private, on class 4, will be paid about £25 a day. Even if we assume that privates have an eight-hour day, their hourly pay would fall below the minimum wage—which is why the Minister has been prevailed on by his colleagues in the Ministry of Defence to accede to their requirement that the Bill should not apply to the armed forces. However, anyone who thinks that a squaddy does an eight-hour day needs his head examined, because our forces work many more hours than that. I suspect that, throughout the pay scale of junior service personnel, quite a few people would be caught by the measure. I therefore ask the Minister—who is not an unreasonable chap, although he sometimes rants a bit—to explain how senior officers will explain to soldiers why they will be paid less than those who may be doing a possibly analogous job, but who are civil servants or civilian Crown employees and not part of the armed forces.
The clause also exemplifies the differences in how the different services are organised. The Royal Navy has watches. The Royal Air Force tends to work a shift system, but the Army does not. That, again, illustrates the differences in treatment of those in the different services.
The amendment strikes me as extremely reasonable. It requires Ministers to
lay before both Houses of Parliament a report explaining the reasons for any disparity of treatment

between service men and their civilian counterparts. I hope that the Minister has a good explanation. If he has not, I shall feel inclined to divide the House. It should be borne in mind that I represent Aldershot, the home of the British Army.

Mr. Ian McCartney: I do not think that any hon. Member of any political persuasion does not represent members of, or families of members of, the armed forces, and those of us with constituencies in industrial and metropolitan areas represent an over-preponderance of families who send their young men and women to serve the country in the armed forces.
The hon. Member for Aldershot (Mr. Howarth) did not help the debate by attempting some guerrilla tactics to find out whether I—or the Government—was committed to the personnel of the armed forces. No one in the House has a monopoly on matters relating to the armed forces. There is a long tradition in the House—perhaps throughout the century. In the case of issues relating to national sovereignty, disputes abroad and, indeed, Northern Ireland, there has been a common approach to the needs of our armed forces personnel, and to the way in which we as a nation should deal with them.
I do not intend to take the line that the hon. Member for Aldershot would like me to take. I do not want to engage in schoolboy banter about whether the present Government are less committed to the armed forces. We are patently not, nor would we be. In Committee, it was clear from what I said on behalf of the Government that our proposals—the proposals that we advanced to create the new clause—were based on the unique circumstances of the armed forces, and that we were clear and specific in our own mind that the mechanisms for the Armed Forces Pay Review Body would meet requirements to ensure that the armed forces were dealt with fairly in terms of their pay and conditions.
I stress that the decision to deal with the armed forces in that way was taken only because the pay review body provided a suitable mechanism to ensure that service men and women were not disadvantaged by the exemption. If we had not felt that the arrangements would meet the requirement adequately, we would have dealt with it in a different way. The review body offers a well-established and credible system which has had not only the confidence of successive Governments but, more importantly, that of the armed forces themselves. In formulating its recommendations to the Government, the review body looks carefully at a range of matters, including comparability with similarly weighted civilian jobs in the private sector.

Mr. Letwin: I am genuinely interested in the Minister's answer to my question. If he really considers the pay review body to be a sufficient safeguard, why does the Agricultural Wages Board—which has been mentioned on earlier amendments—not do the same task for agricultural workers?

Mr. McCartney: The Agricultural Wages Board is an entirely different issue. We have co-ordinated the role of the board with the legislation. We said that in Committee, and, at some point in this evening's—or this morning' s—debate, my hon. Friend the Minister for Small Firms, Trade and Industry made it clear that the board would come up for review in 1999. Between now and 1999, it is


not only reasonable, but sensible that the national minimum wage should interface with the agricultural wages system.
We have ensured, first, that as the Agricultural Wages Board payment is higher than the national minimum wage, if appropriate, agricultural workers will be paid the Agricultural Wages Board rate and secondly, that agricultural workers receiving less than the minimum wage will be brought up to the level of the minimum wage so that there will be no discrepancy affecting agricultural workers. They will be paid either the Agricultural Wages Board rate or at least the national minimum wage. Therefore, the point raised by the hon. Gentleman is spurious.
The Government have made it clear that any movement in civilian pay levels as a result of the introduction of the national minimum wage will be reflected in the Armed Forces Pay Review Body recommendations and feed through to service pay.
6.15 am
The review body is aware of the need to give special consideration to the circumstances of particular groups. Its 1998 review recommended higher increases for the lowest-paid service personnel. It is also open to the Government, in their economic and other evidence, to draw to the review body's attention particular factors, such as the need to take into account the relationship between the national minimum wage and service pay.
There is already a parliamentary reporting system. The review body's observations and recommendations are already published in a report, and copies are placed in the Libraries of both Houses.
The Government have every confidence in the ability of the Armed Forces Pay Review Body to take full account of the need to ensure that service pay does not fall below the national minimum wage when making its recommendations. If Opposition Members do not share that confidence, they should say so or withdraw the amendment.

Mr. Gerald Howarth: If the Minister is confident that the Armed Forces Pay Review Body will ensure that no service man receives pay below the national minimum wage, what is the point in having an exemption for the armed services in the Bill?

Mr. McCartney: I know that it is early in the morning, but we made it absolutely clear—and the hon. Member for Daventry (Mr. Boswell) agrees—that we considered it a more appropriate method of ensuring proper remuneration for our armed forces personnel. I thought that there was now a common approach on the matter across the Floor of the House. Let me repeat to the hon. Member for Aldershot that no one can claim, individually or collectively, to be the sole arbiter of pay and remuneration in the armed forces. The Government are committed to our armed forces and to providing fairness in pay and other remuneration, and we shall keep to those commitments. That is why, if the Opposition press the amendment, I recommend that the House rejects it.
I have attempted to be fair in the way in which I have dealt with the amendments; I have addressed them in the spirit in which they were moved. We had a more

rumbustious debate in Committee, but this evening we have approached the issue differently. We have had the battle upstairs and the battleground has now been cleared. The smoke has now left the battlefield, we all know where we are going and the sooner that we can move forward, the better.

Mr. Boswell: My reservation about the matter is that the Minister of State carefully avoided the fact that, although there was an Armed Forces Pay Review Body, by which he set great store—as I do—the Government have not implemented its recommendations in full and immediately. Any suggestion of parity was avoided, therefore, and that is what the amendment was about.
I was concerned by the tone of some of what the Minister said in response to the helpful speech and intervention by my hon. Friend the Member for Aldershot (Mr. Howarth), who represents the home of the British Army and might have received somewhat more gracious treatment from him.
I am a modest man, not prone to wrath, but, in the context of the amendment, the House may wish to consider whether it now proceeds to a call of reveille.

Amendment negatived.

Clause 42

VOLUNTARY WORKERS

Amendment made: No. 20, in page 25, leave out lines 5 to 14.—[Mr. Betts.]

Clause 46

APPLICATION OF ACT TO SUPERIOR EMPLOYERS: LIABILITY OF EMPLOYERS AND OTHERS IN RESPECT OF OFFENCES

Amendment made: No. 28, in page 27, leave out lines 8 to 18.—[Mr. Betts.]

Schedule 1

THE Low PAY COMMISSION

Mr. Boswell: I beg to move amendment No. 69, in page 34, line 27, at end insert—
'Disqualification by Scottish Parliament and National Assembly for Wales
6. A member of the Commission is disqualified from being—

(a) a member of the Scottish Parliament, or
(b) a member of the National Assembly for Wales.'.

I am a little disappointed—indeed, I am mortified—that, despite the efforts of some of my hon. Friends to wake up the House a few moments ago, no Ministers from the Scottish Office or the Welsh Office are present for a debate about important business that bears on Scotland and Wales. I am relatively inexperienced in the consideration of difficult constitutional matters. My sole qualifications are that I have a Scottish name and a Welsh wife. I am distressed at having to do without the assistance of Ministers from those Departments.
The amendment is consensual, so the Ministers need not have stayed away. Membership of bodies financed and serviced by the Crown may give rise to disqualification. Someone who joins a quango financed by the Government or takes up a job as a salaried civil


servant is disqualified from membership of this House. That also applies to membership of the Northern Ireland assembly, which is a dead letter at the moment. Those two cases are provided for in schedule 1, but there is no such disqualification for the Scottish Parliament or the National Assembly for Wales.
I have made inquiries about that. My hon. Friend the Member for North-East Hertfordshire (Mr. Heald) is a constitutional specialist who keeps an eye on such proceedings, on which I was temporarily unsighted. He shared my view that the issue should be sorted out in the Bill.
I then sought correspondence with the Minister's Department. We had a useful exchange; he replied promptly in order to inform consideration on Report. He replied to the effect that there was no such automatic disqualification, but that it could be extended under the provisions of the Scotland Bill and the Government of Wales Bill in due course by Order in Council. I am sure that that is the Government's intention.
We, as ever, are anxious to help the Government on their way, and the amendment would simply provide at this point, cleanly and neatly in this Bill, a disqualification from the Scottish Parliament and the National Assembly for Wales of persons who are—or happen to be at the time—members of the Low Pay Commission. It is no more and no less than that, and I hope that, at this late stage, the Government, who have shown such relative reluctance to consider and adopt our amendments, might break their duck.

Mr. Ian McCartney: I am afraid that I cannot help the hon. Member for Daventry (Mr. Boswell)—not even at this early hour. Amendment No. 69 attempts to make much ado about nothing. I have written to the hon. Gentleman about the matter, which he raised in Committee. I thank him for writing to me because it gave me an opportunity to confirm what I said.
The amendment proposes that the Bill should specify now that members of the Low Pay Commission should be disqualified from being Members of the Scottish Parliament or Members of the National Assembly for Wales. My reaction to this is: all in good time; there is no need to rush our fences.
Schedule 1 does not treat members of the Low Pay Commission any differently from members of other statutory bodies. All such members are disqualified from the Westminster Parliament by being listed in part II of schedule 1 to the House of Commons Disqualification Act 1975. The list covers dozens of bodies. It starts with members of the Advisory Committee on Hazardous Substances, and includes the council of the Advisory, Conciliation and Arbitration Service, and members of the Health and Safety Executive, the Equal Opportunities Commission, the Monopolies and Mergers Commission, and many others. The process is entirely normal.
There is also a short list of disqualified persons in paragraphs (a) to (e) of section 1(1) of the Disqualification Act, which disqualifies judges, civil servants, members of the armed forces, members of police forces and members of foreign legislatures from being Members of this House. That short list is in the Scotland Bill and the Government of Wales Bill.
Decisions about the long list of disqualified persons for the Scottish Parliament and the National Assembly for Wales do not need to be taken now, although they will, of course, need to be taken later. That could be done in a number of ways. First, a decision will need to be taken, by means of orders made by the House and the other place, on disqualification prior to the first elections to those bodies. That will, no doubt, involve debate on the position of members of various statutory bodies, including the Low Pay Commission.
If the decision on the long list were not taken at Westminster prior to elections for the Scottish Parliament, that body, once elected, could make the decision itself by means of order-making powers under the Scotland Bill. In Wales, the position is different: the order-making power is retained by the Secretary of State. Whatever the situation, it will clearly make sense to have due regard to the long list of those already disqualified from Westminster.
The terms of appointment of members of the Low Pay Commission will be determined by the Secretary of State. It would be open to the Secretary of State to draft those terms of appointment in a way that excluded Members of any Parliament or assembly, regardless of whether they were automatically excluded by those bodies themselves.
Frankly, I regard all this as hypothetical and rather arcane. The important point is that we are committed to the independence and effectiveness of the Low Pay Commission. Despite the high regard that I have for hon. Members, I do not see their talents as being suited to the non-partisan and neutral approach that the commission needs to take in order to preserve its credibility.
My response to the amendment is that the matter will all be sorted out in good time. It does not make sense to pre-empt the process by amending the Bill in the way proposed. I have every confidence that sensible people will come to sensible conclusions on disqualification from the Scottish Parliament and the National Assembly for Wales, both for members of the Low Pay Commission and for members of all other statutory bodies concerned. I therefore ask the House to reject the amendment if Opposition Members persist in putting it to a vote.

Mr. Boswell: I found the Minister of State's reply disappointing and deeply implausible. Perhaps he has been working too long on the Bill, but there has been an unanticipated coalescence between the Minister and his officials. Suddenly, the mask of McCartney—he of the curve, which we discussed earlier—slipped, and we heard Sir Humphrey's voice speaking. We had the argument that Rome was not built in a day, and that it would all be sorted out in time—and probably it will be. It could have been sorted out tonight by our amendment, but it was not to be.
Purely as a gesture of good will to the Minister, because he has done his best to respond and has worked very hard in Committee and tonight, I advise my hon. Friends, exceptionally and against my better judgment, not to press the amendment to a Division. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 2

AMENDMENTS RELATING TO REMUNERATION ETC OF AGRICULTURAL WORKERS

Amendments made: No. 29, in page 35, line 29, at end insert—
'(12) Where an order under this section fixes any particular minimum rate of wages by reference to two or more component rates, of which—

(a) one is the principal component, and
(b) the other or others are supplemental or additional components,

(as in a case where the minimum rate for night work is fixed as the sum of the minimum rate payable in respect of work other than night work and a supplemental or additional minimum rate in respect of working at night) the national minimum wage provisions of this section apply in relation to the principal component rate and not the supplemental or additional component rates.
(13) The national minimum wage provisions of this section do not apply in relation to any minimum rate which is in the nature of an allowance payable in respect of some particular responsibility or circumstance (as in a case where a minimum rate is fixed in respect of being required to keep a dog).
(14) The national minimum wage provisions of this section do not apply in relation to any minimum rate fixed under this section—

(a) by virtue of subsection (2)(d) of this section, or
(b) by virtue of section 67 of the Agriculture Act 1967 (sick pay),

unless and to the extent that regulations under section 2 of the National Minimum Wage Act 1998 make provision which has the effect that circumstances or periods in respect of which the minimum rate in question is required to be paid to a worker are treated as circumstances in which, or times at which, a person is to be regarded as working.
(15) In this section "the national minimum wage provisions of this section" means subsections (2B), (2C) and (8) to (10) of this section.'.

No. 11, in page 36, line 22, at end insert—
'(5) In section 104A of the Employment Rights Act 1996 (unfair dismissal: national minimum wage) in subsection (1)(c)—

(a) any reference to a person qualifying for the national minimum wage includes a reference to a person being or becoming entitled to a minimum rate applicable under this Act; and
(b) any reference to a person qualifying for a particular rate of national minimum wage includes a reference to a person being or becoming entitled to a particular minimum rate applicable under this Act.'.

No. 31, in page 37, line 23, at end insert—

Section 12

6A.—(1) Section 12 (officers) shall be amended as follows.

(2) In subsection (5)(a) (power to institute civil proceedings on behalf of worker on account of payment of wages at less than the applicable minimum rate etc) the words "on account of the payment of wages to him at less than the minimum rate applicable or" shall cease to have effect.

(3) At the end of the section there shall be added—
(8) The powers conferred by subsections (3) and (4) of this section are not exercisable in any case where corresponding or similar powers conferred by any of the enforcement provisions of the National Minimum Wage Act 1998, as they have effect for the purposes of this Act, are exercisable by virtue of section 3A of this Act.
(9) In subsection (8) of this section, "the enforcement provisions of the National Minimum Wage Act 1998" has the same meaning as in subsection (1) of section 3A of this Act.".'.

No. 33, in page 37, line 23, at end insert—
'Information obtained by national minimum wage officers
6B. After section 15 there shall be inserted—
"Information obtained by national minimum wage officers
15A.—(1) This section applies to information which has been obtained by an officer acting for the purposes of the National Minimum Wage Act 1998 and which is held by—

(a) the Secretary of State; or
(b) a government department or other body which is party to arrangements in force under section 13(1)(b) of that Act.

(2) This section does not apply to any information to the extent that the information relates to—

(a) any failure to allow holidays directed to be allowed by an order under section 3 of this Act; or
(b) any terms and conditions of employment fixed by such an order by virtue of subsection (1)(c) of that section.

(3) Information to which this section applies may, with the authority of the Secretary of State, be supplied to the relevant Minister for use for any purpose relating to this Act.
(4) Information supplied under subsection (3) of this section shall not be supplied by the recipient to any other person or body unless—

(a) it could be supplied to that person or body under that subsection; or
(b) it is supplied for the purposes of any civil or criminal proceedings relating to this Act;

and shall not be supplied in those circumstances without the authority of the Secretary of State.
(5) This section does not limit the circumstances in which information may be supplied or used apart from this section.
(6) In this section "the relevant Minister" means—

(a) in relation to England, the Minister of Agriculture, Fisheries and Food; and
(b) in relation to Wales, the Minister of the Crown with the function of appointing officers under section 12 of this Act in relation to Wales.".'.

No. 36, in page 38, line 49, at end insert—
'(12) Where an order under this section fixes any particular minimum rate of wages by reference to two or more component rates, of which—

(a) one is the principal component, and
(b) the other or others are supplemental or additional components,

(as in a case where the minimum rate for night work is fixed as the sum of the minimum rate payable in respect of work other than night work and a supplemental or additional minimum rate in respect of working at night) the national minimum wage provisions of this section apply in relation to the principal component rate and not the supplemental or additional component rates.
(13) The national minimum wage provisions of this section do not apply in relation to any minimum rate which is in the nature of an allowance payable in respect of some particular responsibility or circumstance (as in a case where a minimum rate is fixed in respect of being required to keep a dog).
(14) The national minimum wage provisions of this section do not apply in relation to any minimum rate fixed under this section—

(a) by virtue of subsection (2)(d) of this section, or
(b) by virtue of section 67 of the Agriculture Act 1967 (sick pay),

unless and to the extent that regulations under section 2 of the National Minimum Wage Act 1998 make provision which has the effect that circumstances or periods in respect of which


the minimum rate in question is required to be paid to a worker are treated as circumstances in which, or times at which, a person is to be regarded as working.
(15) In this section "the national minimum wage provisions of this section" means subsections (2B), (2C) and (8) to (10) of this section.'.

No. 35, in page 39, line 40, at end insert—
'(4) In section 104A of the Employment Rights Act 1996 (unfair dismissal: national minimum wage) in subsection (1)(c)—

(a) any reference to a person qualifying for the national minimum wage includes a reference to a person being or becoming entitled to a minimum rate applicable under this Act; and
(b) any reference to a person qualifying for a particular rate of national minimum wage includes a reference to a person being or becoming entitled to a particular minimum rate applicable under this Act.'.

No. 37, in page 40, line 40, at end insert—

'Section 12

14A.—(1) Section 12 (officers) shall be amended as follows.

(2) Subsection (4)(a) (power to institute civil proceedings on behalf of worker on account of payment of wages at less than the applicable minimum rate etc) shall cease to have effect.

(3) At the end of the section there shall be added—
(7) The powers conferred by subsection (3) of this section are not exercisable in any case where corresponding or similar powers conferred by any of the enforcement provisions of the National Minimum Wage Act 1998, as they have effect for the purposes of this Act, are exercisable by virtue of section 3A of this Act.
(8) In subsection (7) of this section, "the enforcement provisions of the National Minimum Wage Act 1998" has the same meaning as in subsection (1) of section 3A of this Act.".'.

No. 39, in page 40, line 40, at end insert—
information obtained by national minimum wage officers
14B. After section 15 there shall be inserted—
"Information obtained by national minimum wage officers
15A.—(1) This section applies to information which has been obtained by an officer acting for the purposes of the National Minimum Wage Act 1998 and which is held by—

(a) the relevant Minister; or
(b) a government department or other body which is party to arrangements in force under section 13(1)(b) of that Act.


(2) This section does not apply to any information to the extent that the information relates to—

(a) any failure to allow holidays directed to be allowed by an order under section 3 of this Act; or
(b) any terms and conditions of employment fixed by such an order by virtue of subsection (1)(c) of that section.


(3) Information to which this section applies may, with the authority of the relevant Minister, be supplied to the Secretary of State for use for any purpose relating to this Act.
(4) Information supplied under subsection (3) of this Act shall not be supplied by the recipient to any other person or body unless—

(a) it could be supplied to that person or body under that subsection; or
(b) it is supplied for the purposes of any civil or criminal proceedings relating to this Act;

and shall not be supplied in those circumstances without the authority of the relevant Minister.
(5) This section does not limit the circumstances in which information may be supplied or used apart from this section.

(6) In this section "the relevant Minister" means the Minister of the Crown with the function of appointing officers under section 13(1)(a) of the National Minimum Wage Act 1998.".'.

No. 30, in page 42, line 49, at end insert—
'(17) Where an order under this Article fixes any particular minimum rate of wages by reference to two or more component rates, of which—

(a) one is the principal component, and
(b) the other or others are supplemental or additional components,

(as in a case where the minimum rate for night work is fixed as the sum of the minimum rate payable in respect of work other than night work and a supplemental or additional minimum rate in respect of working at night) the national minimum wage provisions of this Article apply in relation to the principal component rate and not the supplemental or additional component rates.
(18) The national minimum wage provisions of this Article do not apply in relation to any minimum rate which is in the nature of an allowance payable in respect of some particular responsibility or circumstance (as in a case where a minimum rate is fixed in respect of being required to keep a dog).
(19) The national minimum wage provisions of this Article do not apply in relation to any minimum rate fixed under this Article by virtue of Article 5 or 8(5), unless and to the extent that regulations under section 2 of the National Minimum Wage Act 1998 make provision which has the effect that circumstances or periods in respect of which the minimum rate in question is required to be paid to a worker employed in agriculture are treated as circumstances in which, or times at which, a person is to be regarded as working.
(20) In this Article "the national minimum wage provisions of this Article" means paragraphs (1A), (1B) and (13) to (15).'.

No. 12, in page 44, line 28, at end insert—
'(5) In Article 135A of the Employment Rights (Northern Ireland) Order 1996 (unfair dismissal: national minimum wage) in paragraph (1)(c)—

(a) any reference to a person qualifying for the national minimum wage includes a reference to a person being or becoming entitled to a minimum rate applicable under this Order; and
(b) any reference to a person qualifying for a particular rate of national minimum wage includes a reference to a person being or becoming entitled to a particular minimum rate applicable under this Order.'.

No. 34, in page 44, line 28, at end insert—
'Information obtained by national minimum wage officers
23. After Article 11 there shall be inserted—
Information obtained by national minimum wage officers.
11A.—(1) This Article applies to information which has been obtained by an officer acting for the purposes of the National Minimum Wage Act 1998 and which is held by—

(a) the Secretary of State; or
(b) a government department or other body which is party to arrangements in force under section 13(1)(b) of that Act.

(2) This Article does not apply to any information to the extent that the information relates to any failure to allow holidays in accordance with Article 8.
(3) Information to which this Article applies may, with the authority of the Secretary of State, be supplied to the Department for use for any purpose relating to this Order.
(4) Information supplied under paragraph (3) shall not be supplied by the recipient to any other person or body unless—

(a) it could be supplied to that person or body under that paragraph; or
(b) it is supplied for the purposes of any civil or criminal proceedings relating to this Order;



and shall not be supplied in those circumstances without the authority of the Secretary of State.
(5) This Article does not limit the circumstances in which information may be supplied or used apart from this Article.".'.—[Mr. Ian McCartney.]

Schedule 3

REPEALS AND REVOCATIONS

Amendments made: No. 32, in page 44, line 45, column 3, at end insert
'In section 12(5)(a), the words "on account of the payment of wages to him at less than the minimum rate applicable or".'.

No. 38, in page 45, line 10, column 3, at end insert `Section 12(4)(a).'.—[Mr. Ian McCartney.]

Order for Third Reading read.

Motion made, and Question proposed, That the Bill be now read the Third time.—[Mr Betts.]

Mr. Ian McCartney: I know that it is early, but it is late for those of us who have been working on the Bill since 3.30 pm yesterday—and, indeed, for those of us who have been working on it for 20 years. It has been a long time coming. It was in February 1912–86 years ago—that the then leader of the Labour party moved on the Floor of the House an amendment to the Loyal Address to the then King's Speech, calling for the introduction of a national minimum wage. It is astonishing that it has taken 86 years for us to reach this stage, but, having got here, we intend to press on with the Bill.
The Bill is a straightforward and direct attack on the scandal of low pay. We shall introduce it and establish a principle of universality, clarity and simplicity. It will be truly a national minimum wage, just in time for the 21st century. This is a priority policy, on which Labour Members are proud to have won the general election. It is right, fair, just and sensible.
I thank all hon. Members who have spoken in support of the Bill on Report, on Second Reading, and during the magnificent effort in Committee. The time is right—indeed, overdue—for a minimum wage to be introduced, on both social and business grounds. Together with tax and benefit reform, it can promote work incentives and form part of a strategy to make work pay. It will ensure greater decency and fairness in the workplace and tackle the problems of in-work poverty.
Employees deserve good terms and conditions, and protection from exploitation. This measure reflects our determination to be a force for progress and social justice.
The Government are dedicated to fairness and decent minimum standards at work for all workers, and decent minimum standards include the right to a fair day's pay for a fair day's work. We have seen the results of the policies followed in the United Kingdom during the past 18 years by the Conservatives: the largest gap between rich and poor since the days of gas lamps and the Hansom cab. Conservative policies have led to a situation where a security guard can be expected to work between 85 and 100 hours a week, at an hourly rate of £1.80, and provide his or her own dog and van.
Nearly 1 million workers in Great Britain are currently paid less than £2.50 an hour. That is the Conservatives' legacy, and they should be ashamed of it.
That is why we established, in 90 days of the Labour Government, a Low Pay Commission made up of employers, employee representatives and specialists in the field, to make recommendations for a statutory rate for the minimum wage and on other issues. The Low Pay Commission will soon complete its work and make its proposals. As soon as it has done so, the Government will act and respond quickly, to ensure that we go forward and fully implement the minimum wage as soon as possible.
Throughout debates on the Bill in the House and in Committee, we have heard the familiar old parrot cry of the Conservatives: "Low pay or no pay." That is their strategy. They have argued that job losses will follow the introduction of a minimum wage, despite the fact that there is absolutely no evidence that a minimum wage, sensibly set to take into account economic circumstances, will lead to job losses. They have lost the argument in the country and in the House. We will move forward with some speed with the introduction of a national minimum wage.
The Conservatives have also lost the argument within business. Increasingly, business in Britain sees the economic case for the national minimum wage. Businesses are sick and tired of being undercut by cowboy employers paying £1.20 or £1.30 an hour, not competing on goods and services, but simply driving wages lower and lower. Britons cannot survive in a low-pay economy. We cannot compete overseas with Vietnam on the basis of 20 cents an hour. Our country deserves better—it deserves investing in our work force and in their employability and training and the commitment to minimum standards and the production of goods and services that are world beaters. One cannot do that if one simply wants to drive down wages to the lowest common denominator.
For those reasons, businesses increasingly see the business case for the national minimum wage. That is why business abandoned the Conservatives in Committee—not one business in Britain has been prepared to put its head above the parapet and support Conservative Members, because businesses do not want to be associated any more with the concept of poverty pay. Only those Conservative business people who are native to the Conservative party have stopped by the line of, "Low pay or no pay." We will not accept that from anyone, particularly from big backers of the Conservative party who earn millions of pounds a year in the City, while condemning millions of people in Britain to such low pay. It is rank hypocrisy and the Bill has revealed the hypocrisy of Conservative Members.
Conservative Members can no longer simply state that the Confederation of British Industry and other employer organisations do not want to participate in the early implementation of the minimum wage. The CBI and others want fair implementation of the legislation. Increasingly, employers are co-operating with the Government and the Low Pay Commission to ensure that that is the case.
The Tories are left abandoned, and rightly so. They cannot get out of the time warp they are in; for nearly 20 years they thought that Britain's success relied simply on driving down the pay and conditions of its work force, when it was crying out for investment in its work force, not damaging it and destroying it. They left us with a legacy of low pay, and of unemployment, which was


twice the level that it was when the previous Labour Government left office. That is the legacy of the Tory's failed economic policies.
In closing, I want to consider what Alan Fisher and Bernard Dix of the National Union of Public Employees appreciated more than 20 years ago. In their book, "Low Pay and How to End It", they said:
the first step in the construction of a policy to eliminate low pay must be the acceptance of the people that there is a level of wages below which nobody should be expected to work. This is an act of political commitment which has been dodged in most of the earlier discussion on low pay but which is essential if the problems of the low paid worker are to become a matter demanding an immediate practical solution rather than remaining the subject of detached academic curiosity. With public acceptance of this principle we can begin to fill out the arguments and some of the problems which confront us in the implementation of the principle in the full knowledge that we are committed to action rather than never-ending discussions.
The three crucial factors that those eminent trade unionists identified were public acceptance, political commitment and a practical solution. We now have public acceptance of the principle as shown by the result of the general election. The Bill and the setting up of the Low Pay Commission are the confirmation of our political commitment and our arrival at a practical solution. Now is the time to end the academic discussion and transform the dream into a reality. I commend the Bill to the House.

Mr. Redwood: I pay tribute to my hon. Friend the Member for Daventry (Mr. Boswell) for the great leadership that he has shown in Committee and tonight to try to get proper examination of this problematic legislation and to my hon. Friends the Members for South Cambridgeshire (Mr. Lansley) and for Buckingham (Mr. Bercow), who made their first appearance at the Dispatch Box and spoke extremely eloquently on the amendments that they moved. I also pay tribute to all my hon. Friends who spent much time in Committee and who, during tonight's brief debates, have tried to make some sense of this rag-bag of a Bill, which splits the Labour party—[Laughter.] It splits the Labour party—some Labour Members, in speaking to an amendment tonight, said that they greatly disliked aspects of the Bill.
There have been wars between Ministers. Like most hon. Members, I know that the Minister of State is not at all happy that the armed forces are to be exempted from the Bill. He and his colleagues fought the Ministry of Defence for several weeks, but their resistance crumbled and he now has to defend a proposition that he does not like. That is why he always returns to grand principles and grand statements and reminds us, genuinely, of the campaigning work that he has done on this issue over many years.
It will not wash, however. When we see the final proposals, all the exempted groups and the low level at which the minimum wage will be set compared with what Labour Members wanted, we shall know that the damaged and divided Labour party is not happy about the Bill, and that it is still in trouble trying to find out how this country's economy works.
I shall describe the context of the Bill, which is another thing that the Labour party will not want to hear. Manufacturing industry is now in grave trouble thanks to the economic policies that have been pursued in recent

months under the Chancellor of the Exchequer and his Labour colleagues. Every day, I receive another letter or telephone call from someone in manufacturing industry, telling me that it is impossible to compete when sterling and interest rates are so high. People tell me that costs are the problem. The last thing that they want is an enforced large wage increase that will have an impact not only on lower pay, but on differentials, which is the likely result of the Bill.

Dr. Desmond Turner: The right hon. Gentleman seems to be terribly concerned about the Bill's effect on manufacturing industry, but, to the best of my knowledge, no serious manufacturing company pays workers at a lower rate than even anywhere near what the minimum wage might offer. What is the relevance of his point? Low wages have no place in serious, modern business, so what is he talking about?

Mr. Redwood: The hon. Gentleman obviously knows more than the Minister about the level at which the minimum wage will be set—the Government have been absolutely quiet on that fundamental issue. The hon. Gentleman did not listen to what I was saying. I said that business is worried about the Bill's consequences for differentials. If, by law, the lowest levels of remuneration must be raised, the skilled and the semi-skilled who already receive more will, of course, want proportionate increases.
Even the Cabinet has worked that out. As we read in the papers the other day, Cabinet Ministers are depressed about the possibility that, in comparison with the pay of junior Ministers, their pay will increase rather modestly in percentage terms. Cabinet Ministers are saying that they need the differentials to be preserved—they want the same percentage increase as junior Ministers, even though that would mean that they would receive a much larger pay rise.
One of the big worries of Conservative Members is that the Bill could trigger a wage increase of some magnitude, which, according to the Chancellor of the Exchequer, would be deeply damaging to jobs and economic prospects.

Mr. Chris Pond: Given that the right hon. Gentleman supported the previous Government's decision to abolish the minimum wage system that existed at the time, and given that he has so many reservations about the Bill, will he say categorically whether—at some time in the future, in circumstances which it is difficult for us to imagine, with his party again in government—he would repeal the Bill? May we have a straight answer?

Mr. Redwood: We expect the governing party to do a lot of damage in the next three years, before going to the country. When we get nearer the general election, my right hon. and hon. Friends and I will decide which of the many undesirable measures we intend to repeal. I may well then be able to answer the hon. Gentleman's question. We will examine the whole range of damage that the Government are doing and come to a considered judgment about our first legislative programme, which we will put to the country. We will then win that general election.
Labour Members should pay more attention to what the Chancellor says and does. He recently read the riot act to the British economy and British business. He told


everyone that if wages go up at all quickly over the next year or two economic damage will be done, hinting that he might even take retaliatory action by raising taxes or reducing public spending. He said that jobs will be lost if pay increases accelerate.
The Chancellor clearly does not know what to do, because pay increases, especially in the service sector, are accelerating. We have two economies: the manufacturing economy, which is moving into recession, with output falling, and the much bigger service economy, which is extremely buoyant, with wages rising rapidly by the standards of the recent past.
The Bill, emanating from the Department of Trade and Industry, is in complete opposition to the Chancellor's view of what we need to do on wages. It is designed to increase wages by perhaps 20 or 25 per cent. at the lowest end of the spectrum—if we knew the rate of the minimum wage, it would be easier to do the sums—with proportionate increases for the skilled people in good bargaining positions who want to preserve differentials.
The Minister tells us that that will have no impact on unemployment, but the Chancellor tells us that any wage increase will affect unemployment. He is even worried that the relatively small increases of the past year or so could accelerate just a little and cause problems. [Interruption.] Labour Members are now quibbling with the Chancellor. I am expressing not my view, but his; it is a view about which he made many speeches and issued a press statement, because he was so worried about accelerating wages.
The essence of the welfare-to-work programme is to try to subsidise employment—to lower its costs—so as to create more jobs. We wish the programme well, but we believe that the best way of creating jobs is to have a low-tax economy, with less regulation and law, that is more competitive and allows more small businesses to be set up and to create the jobs that are needed.
The Chancellor's scheme of lowering the costs of employment through subsidies is about to be undermined—in a couple of years, when the full impact is felt—by legislation designed to raise industrial costs.
The Minister owes the House a proper explanation of what impact the Bill will have on inflation. He should by now have a clear idea in his own mind—even if he will not share it with the House—of the likely level of the minimum wage. From his many impassioned speeches, it is clear that he wants to increase wages. That is the purpose of the Bill. He understandably wants many people to be better paid, as would I, but the argument between us concerns whether that can be done by legislation and whether the Bill will have worse consequences than he is letting on for those hoping to benefit.
Conservative Members believe that higher pay must be achieved by economic success. Some Labour Members believe that they can achieve it by a stroke of the legislative pen. They are likely to trigger a big increase in differentials and, if we are to believe the Chancellor, unemployment problems.
The Government have also been unwilling to share with the House the true costs of the measure to the taxpayer and the Government accounts. One of their forecasts suggests that the cost will be £200 million on general

public sector costs, if the minimum wage were set at £3.75 an hour. That is an underestimate in itself, but we must add the much bigger figures that will tumble through to the public sector wage bill if we assume some increase in differentials. The true cost is likely to be several times the estimate of £200 million.
We need a proper explanation from the Government of what the Bill will do to their public borrowing plans and their tax-raising plans, and how the Chancellor will find the additional money at a time when the Prime Minister is lecturing everybody on how they must not increase spending and must run a tight ship.
The Government must also consider the cost of the higher unemployment that is likely to result from the consequences that I have described. At some point, there will, unfortunately, be a turn for the worse in the favourable trends of unemployment that have resulted from the Conservative economic policies that have been followed since the end of 1992. The Bill could well be one of the factors that tip the balance the other way as it makes its job-destroying progress. To the effects of the Bill must be added the action that the Government will take on trade union reform and on implementing the social chapter, which we have warned is likely to lead to further job losses.
The lack of any indication of the level of the minimum wage—[Interruption.] I am glad that Labour Members are still awake. It is good to see that so many Labour Members have shown enough interest in the Bill to stay with us so far. That is good of them, as we have not had a Division since 10 o'clock. They are obviously fascinated by the debate and they will have heard many fine speeches by Conservative Members.

Mr. Ian Bruce: Given that the Government have been in power since May, could it be that Labour Members were expecting that the Minister, in his speech on Third Reading, would share with us his expectations about the level of the minimum wage? The Minister kept talking about terrible poverty pay, but he would not tell us what he believes that to be.

Mr. Redwood: My hon. Friend is right. What does the Minister consider to be poverty pay? He is impassioned about it, but he cannot name a figure or even give us a ball park idea.

Mr. Pond: Would you repeal the Bill?

Mr. Redwood: I do not have to answer that question because I am not recommending a minimum wage. [Interruption.] The Minister is recommending a minimum wage and he should tell us the figure at which it will be set.
In 1992, Labour said that the minimum wage had to be £3.40 an hour. If that figure were updated in relation to national earnings, it would reach £4.60 an hour�ža figure well above any of those that have been leaked to the newspapers as the likely level of the minimum wage. Even if we only link the £3.40 figure to inflation, it would have to be nearly £4 an hour to validate the promise made in 1992. If we believe the trade unions and what we read in the newspapers, the level is likely to be £3.60 and, therefore, the Minister's ambition will be thwarted.


The Labour party's ambitions of 1992 will have come horribly unstuck because the Treasury has had a go at them. [Interruption.]

Mr. Bercow: Does my right hon. Friend agree that, in addition to the absurdity of Ministers still failing to offer a view about the level of the minimum wage, it is absurd that—10 months into this Government—not one of the Labour Members who are making stupid and boisterous observations from sedentary positions has offered an independent view on the level of the minimum wage? Are not Labour Members just a bunch of tired and emotional wrecks?

Mr. Redwood: My explanation of Labour Members' conduct is that they are under the thumb of the Minister without Portfolio, who has told them not to name a figure for fear of embarrassing the Chancellor and the Government. We have Hamlet without the prince. We are invited to a meal with no food on offer, and we are not even sure how many people will be invited; there are still arguments about who should be covered by the legislation. We think that a retreat is under way on coverage and on the level of the minimum wage. The Chancellor is likely to fight on and demand a minimum wage much lower than many Labour Members would like.
As my hon. Friend the Member for Buckingham said, it is extraordinary that in a party that claims that this is a flagship measure in which it believes, not one Labour Member is prepared to name a figure for an acceptable minimum wage. I shall give way to anyone prepared to name a figure. It appears that no Labour Member will.

Mr. Pond: I was hoping to get an answer to my earlier intervention. Would the right hon. Gentleman repeal the legislation, yes or no?

Mr. Redwood: I made it clear what our answer was on that. There is no point in boring the House by going over it again. There is no answer from Labour Members on what would be an acceptable minimum wage. They cannot say that they live in fear of the bosses cutting them off. They know that the Chancellor is worried about a minimum wage that would raise anyone's pay anywhere in the country.
We have a similar problem with scope. We were told by the Minister and by the President of the Board of Trade that everyone would be covered. That was their proud boast when they first came to the House with the matter. We learn now that young people are likely to be left out, that anyone under 26 is deemed to be young for that purpose and that the promise will be broken for them. We learn that the armed forces will be left out, although the Minister was unable to explain why. He could not say why people who take such risks for our country on active service would not get the protection that he sees in this legislation; nor was he able to confirm that they would always be earning above it. [Interruption.] The Minister is kind to offer me his water but I have some of my own. I am sure that he will need his.
We need to see what will happen to young voters. In the run-up to the general election, I remember Labour Members telling people that they would be covered by the legislation. They said, "Vote Labour and we will legislate a pay rise for you." We objected. We doubted whether

they would be able to do it and feared that some young people would be issued with a redundancy notice rather than a pay increase. Labour spokesmen reassured the electorate. They did not think that there would be redundancy notices. They were wrong about that. They carried on implying to the electors that every young person would get the full benefit of the minimum wage. Now the Minister looks grumpy, knowing that he cannot deliver. [Interruption.] Now he is trying to cheer up. He knows that he cannot deliver to the young people of Great Britain on that fundamental election promise.
The Minister should also think again about the position of small businesses. They are the main means by which new jobs are generated in Britain. Often, they start off with modest pay and limited hours for the job on offer and gradually build themselves up and can offer something better. He is in danger of destroying the opportunity for small businesses to get started. He is also destroying the opportunity for young people to start off in a modest job on modest pay—more modest than he or I would like—and going on to something better. The best way to get a job is to have a job. The best stepping stone to a better job is to have a not-so-good job. The Minister is in danger of removing some of those important stepping stones from the paths of many people to bigger opportunities and better jobs. Clearly, we are seeing a Government who are still divided over whether unemployment will be a serious problem. The Minister is fighting and losing a rearguard action over the question of the scope and coverage of the legislation.
We have also failed to get much out of the Minister on the question of regional variations. He must know that there are big regional variations around the country in the amount of pay offered to people; he must also know that there are big differences in the costs of living around the regions, depending on housing and transport costs and other important items in the family budget. The Bill proposes to treat everybody the same, wherever they are; it offers no recognition of the fact that different sums are needed to live to the same standard in different parts of the United Kingdom. The costs are simply not the same.
On Second Reading, I asked the President of the Board of Trade to explain to the House whether she thought a factory worker on £4.50 an hour in London was better or worse off than a waitress living outside London on £3 an hour who received free board and lodging. It is arguable that the waitress is getting more than the factory worker in London; it is certainly true that the factory worker faces high housing and other general living costs by virtue of living in the capital city. However, there has been no recognition in Committee or on Report of the regional problem. I have read all the Committee stage Hansards and know that the Minister failed to come up with a scheme for recognising the different costs of living and the fact that different amounts of pay are needed in order to handle those different costs. The Minister should think again about the regional issues his Bill opens up.

Mr. Forth: Following that line of argument, which I completely accept, would my right hon. Friend say that the likely or possible impact on employment levels will vary regionally and that, paradoxically, the regions that will be hardest hit and most adversely affected will be those where pay happens to be lower? Those are probably the sorts of region that, for as long as any of us can


remember, Labour Members have been telling us have been disadvantaged. Will not this legislation further disadvantage those regions that are already struggling?

Mr. Redwood: That is the cruel irony of the Government's position: the regions that need most help in pricing people into jobs are the regions that will suffer most from the legislation, because they will have to accept a national average. In the regions that currently have the worst unemployment and the lowest pay, there will be the biggest problem and we are most likely to see job losses; whereas in the areas that are already overheating, the minimum wage will not present the same sort of problems in terms of unemployment, but it will offer no help to people because so many of them will already receive more than the minimum wage.
In an earlier exchange, I was asked whether there were jobs being offered in my constituency below the likely level of the minimum wage. I was able to confirm that, in my constituency, which has very low unemployment and a successful economy, people are not offering or accepting jobs at less than £4 an hour, because there is no need to. That shows how economic success can deliver higher pay and it shows how the minimum wage will be an irrelevance in the most successful parts of the economy, whereas it will be a hindrance or a disaster in those parts of the country that need the most help.
I was talking about the definition of pay. We have not heard a proper explanation from the Government of how tips, bonuses, share incentives, free accommodation, free meals and other forms of remuneration will be treated. Those are complicated matters and, so that we have a fair system, the Minister should set out—before the Bill is passed—how the calculations are going to be done to ensure comparable treatment between people remunerated in different ways.
I am not sure whether the Minister has thought through the issue of piece rates and what would happen in a factory where most workers were above the minimum wage on a piece rate system, but where a few workers—perhaps trainees or those fairly new to the job—fell below the minimum wage from time to time. Would it be fair for their pay to be made up? Would that not undermine the point of the piece rate system? Is this the Abolition of Piece Rate or Incentive Pay Bill? The Minister has not told us how he would handle that problem.
The Bill reflects another well-known new Labour trait. The Labour party campaigned against quangos and argued that they are not accountable and that matters should be dealt with by elected people. We now discover that a whole area of policy will be delegated to a quango under the Bill. The Low Pay Commission will have a continuing role reviewing the level of the minimum wage. The Minister implies that he does not have a clue about what the minimum wage should be, or how wages should be calculated. That task is being delegated to the quango that the Government have established.
The Minister says that he has devoted his political life to campaigning for better wages by Act of Parliament. It is extraordinary that, when he becomes the Minister and can announce such legislation after all these years, he is mute on the fundamental issue of what constitutes an acceptable level of pay. He is happy for a quango to take

away from him the privilege of introducing what he believes is an acceptable level of pay: a measure in which he can take pride.

Mr. Bercow: Does my right hon. Friend agree that the absence from the Third Reading debate of the President of the Board of Trade suggests that, far from earning her wage, which is a great deal more than the national minimum wage is likely to be, she is slumbering in her grace and favour apartment?

Mr. Redwood: It is a great pity that the President of Board of Trade has taken no formal part in these proceedings during the night.

Mrs. Roche: The President of the Board of Trade was present during parts of these proceedings. Unlike others, my right hon. Friend believes that those who have done the work in Standing Committee should get the credit for it on the Floor of the House. That is why she is such a good boss to her Ministers.

Mr. Redwood: I presume that the hon. Lady's comment was meant to be a criticism, but it was wide of the mark. I ensured that my hon. Friend the Member for Daventry received full credit. He issued the press release today, and is available to do the media interviews. I have paid tribute to him during the proceedings. I am proud of my hon. Friend's work, and he should get credit in the press for the conduct of the Committee and the debate during this night. The legislation is important, so I asked him whether I could speak to some amendments, and we agreed that we would both contribute to the Third Reading debate.
The absence of the President of the Board of Trade is all the more intriguing because she knew that I was planning to speak. It is a great pity that, once again, she cannot face the music on a measure that she is supposed to believe in. I notice that she causes merriment among Labour Members: they must be embarrassed by her absence. Her fleeting visit at the beginning of the proceedings did not extend to making any comment or to offering any support, as the Hansard record will show.
The quango that the Government are establishing has too much power, and it takes responsibilities away from Ministers. It is a pity that Ministers have refused all opportunities to explain whether they will overrule the quango. We do not know whether the Minister has in his mind a level of pay that would be too low and would lead him to reject the conclusions of the Low Pay Commission. We do not know whether the Chancellor of the Exchequer may veto the level of pay that the Low Pay Commission recommends, perhaps with the Minister's blessing. Unless we know that, it is difficult to judge how much power the Bill will convey to the quango. I fear that it will have too much power. Ministers should have done the honest thing and worked out in their own minds what they believe is an acceptable level of pay. They have a huge civil service staff to help them, and they could have announced the level when they introduced the Bill.

Mr. Ian McCartney: In the past, my hon. Friends have called the right hon. Member for Wokingham (Mr. Redwood) the Vulcan. After his current performance, he can be called Mogadon man. The final minute of the right hon. Gentleman's speech shows why


he is so out of touch with British business. The CBI, the Institute of Directors and every other British business organisation support the principle and the concept of the Low Pay Commission, and are working effectively with it. Only the right hon. Gentleman and his colleagues do not recognise that the commission is accepted by both sides of industry as the best way towards the establishment of a national minimum wage.

Mr. Redwood: The Minister said that my remarks just before he intervened showed that I was out of touch. They were that I wanted the Minister to make the decision, and it is interesting that he thinks that that final remark shows that I am out of touch. I would prefer the Minister to make the decision. The minimum wage began as a Labour party measure, and Labour is now trying to use the quango to cloak it with respectability. They are very worried that it will come up with either a figure that is too low, in which case the Minister will be deeply embarrassed, or one that is too high, which will worry the Chancellor because it will destroy jobs.
Business opinion is not as the Minister describes. I have heard many representations from business on the issue, and the CBI has warned that if the minimum wage is set too high, it will lead to a loss of jobs. Companies throughout the country would tell the Minister that if he sets it too high, too far above current remuneration in those companies, jobs will go. I do not know whether the Minister knows the seriousness of the problem in manufacturing. He and his colleagues seem to be doing nothing about the problems that have been created by the Government's independent monetary committee, by their taxation of savings, by their refusal to listen to the arguments against the abolition of PEPs and TESSAs, and against the taxation of pension funds and the £27,000 million tax hit on British business in the Budget. [Interruption.]

Mr. Deputy Speaker (Mr. Michael Lord): Order. Far too many hon. Gentlemen and hon. Ladies are making sedentary remarks. I ask them to desist.

Mr. Redwood: I am grateful to you for that, Mr. Deputy Speaker.
I realise that we are running out of time. The Government did not allow enough time to debate the Bill, and my hon. Friends are frustrated that they have not been able to explore all the important matters in it in the depth that they warrant, given that it is such a lousy Bill.
The Opposition message is that the Government do not care about manufacturing or about savers. Taxing savers in the current economic situation is extremely dangerous and puts all the pressure on interest rates and sterling, and that undermines jobs and prospects in our manufacturing heartlands. The last thing that manufacturing wants is a load of moral lectures and laws from the Labour party on top of the terrible problems that are being created by high sterling and the Government's interest rate policy.
The Chancellor says that he is pursuing a policy of toughness. The Minister is about to unleash a big pay explosion as a result of the differential awards that will be needed as all the skilled groups try to have the same increase as people at the bottom of the scale. The result will be extremely damaging, and that is the opposite of what manufacturing and business needs. The Minister

does not understand business opinion. He is not being open with the House and telling us the level of the minimum wage or who will be affected by the Bill. He has not even told us how wages and remuneration will be calculated for the purposes of the Bill.
The Bill is another death blow to manufacturing and it is bad news for the economy. The Government are throwing away a golden inheritance and they will destroy the job-creating machine that we left them.

Gillian Merron: It is 86 years since a national minimum wage was first brought before the House. The concept has been a long time in Parliament and our debate on Report has also taken a long time. Like many of my hon. Friends, I am happy to sit here for as long as it takes to pass the legislation because it is right for Britain, and that is why the electorate put us in government. The Opposition spoke throughout the early hours of the morning, but we have heard it all before. In the historic Committee on which some of my colleagues and I were privileged to serve, Opposition Members ducked and dived. The undermining of the Bill was dressed up in the form of amendments. We heard all about what we came to term the national minimum gratuities Bill, with Opposition Members believing that tips should be included in a national minimum wage. What on earth were they thinking about?

Mr. Hammond: Will the hon. Lady give way?

Gillian Merron: I believe that the hon. Gentleman has had enough time. I will not give way.
Let us be clear. It is the Opposition who have constantly opposed the national minimum wage. They have not given a direct answer as to whether they would repeal the legislation, but the absence of such an answer gives a clear message. They have been consistent. They are happy with low pay, but we are not.
On behalf of my Labour colleagues, I pay tribute to Ministers, who have shown passion and skill in dealing with the subject. Labour Members have grown accustomed to that and we expect and value that contribution, the like of which the Opposition have no experience of making.
For many years, I have been proud to represent people in the public services, first, in the National Union of Public Employees and, latterly, in Unison: people who cook, clean, care and carry for us, who do the invisible work and who are not regarded highly in our society. We are here today for them.

Mr. Gale: Will the hon. Lady give way?

Gillian Merron: I will not.

Mr. Gale: How much?

Gillian Merron: During the general election, one of my constituents, in deciding how he was going to vote, said to me that the line in the sand for him was decency, that the national minimum wage was all about decency and that that was why he would support Labour.

Mr. Gale: How much?

Gillian Merron: Let us remember that, at this stage in the debate, the constant barracking and constant


questioning about how much the rate will be is a complete diversion. We all know that. The Low Pay Commission has been established so that we have a thoughtful, sensible and well-supported rate. We will have its report in a few short weeks and it does Opposition Members no credit that they criticise the action of a cautious and wise Government. Opposition Members seem to prefer rashness and policies that are irrelevant to the reality of the business world and people's working lives. We will not allow that.
Let us remember that this very construction will bring benefits all round. Businesses in my constituency and in the constituencies of hon. Members on both sides of the House welcome the national minimum wage because they know that it will—

Mr. Lansley: On a point of order, Mr. Deputy Speaker. The hon. Member for Lincoln (Gillian Merron) was at pains to refer to the need to declare interests. I wonder if she would care to declare an interest in relation to her entry in the Register of Members' Interests concerning the loan of a car for seven weeks from Unison, which she records as her former employer.

Mr. Deputy Speaker: That is not a matter for the occupant of the Chair. It is for hon. Members to decide what they need to declare.

Gillian Merron: It is no secret that I am very proud to be associated with Unison and its members.
Businesses welcome the national minimum wage because it will cut unfair competition, where a business undercuts the next business. That is why cleaning companies and private contractors will be pleased to have a national minimum wage. Taxpayers pay £100 a year more than they should to compensate for low-paying employers and to cover the cost of in-work benefits. Women, the majority of whom are low paid and work part time, will benefit. This country will benefit because the national minimum wage will give it a competitive edge. We will have a better trained, more stable and more productive work force. That is what we need to be able to compete.
If Opposition Members need any proof that we need a minimum wage and have not been to their jobcentre, they are welcome to come to the jobcentre in my constituency of Lincoln. They will see vacancies for night care assistants, where people are required to have experience and their own transport and to take full responsibility for £2.20 an hour. Tell me that that is acceptable. Perhaps they would like to see the advertisements for security guards, at less than £3 an hour£and they even have to supply their own dogs. Is that acceptable? I think not.
If ever I need convincing, I think back to when I was a local government worker advising on welfare benefits and debt. In one family a low-paid husband and a wife who was at home caring for the children were claiming in-work benefits. They were struggling, as many low-paid families do, with terrible debts, and I was trying to assist them. On the eve of an election—when, I regret, Labour lost—the wife said that she would be celebrating if Labour won because she would then have something to look forward to. When Labour lost, I felt that we had let

her down. Today, we have not let her down; we have done something for her and for low-paid people who deserve so much better.
My hon. Friends and I were elected to this House to do the sort of work that we have done today. We came here to ensure that this Bill went through. That is what the people of this country want and we will not be diverted from that. Make no mistake—as the Opposition do—about what the people want. They want the first ever national minimum wage in this country, and it is a Labour Government who will give it to them.

Mr. Chidgey: I do not intend to delay the House for long, as I know that other hon. Members wish to speak.
We have come a long way since Second Reading. Dealing with this Bill has been an exhaustive and, for some of us, an exhausting experience. Throughout our debates, many hon. Members—certainly in my party as well as the Labour party—have shared a common aim: to put an end to cowboy employers undercutting their competitors by paying poverty wages which are then subsidised by social benefits paid for by the taxpayer. That has never been right and it has no place in the modern industrial economy to which we aspire and, indeed which we hope to lead in the coming century.
Ministers know that we have some concerns about certain elements of the Bill. Throughout our debates, we have made it clear that we are concerned about the mechanisms for introducing a single national minimum wage. We are concerned about the variation in the economic impact, the degree of which we do not know, that a single national minimum wage could and would have on different areas of the country.
During what has been a very long night, and I am grateful to the Minister—[Interruption.] It is interesting how hon. Members who have come into the Chamber only at this late stage in our proceedings should be so confident that they appreciate the finer points of the debates that have gone before.

Mr. Bercow: Will the hon. Gentleman give way?

Mr. Chidgey: I think not; we have had enough.
We have come some way during the night and I am grateful to the Minister for confirming that the issues on which I have pressed him on a number of occasions will be dealt with by the Low Pay Commission and will feature in its report. That report will precede the secondary legislation which, we are told, will set out the detailed proposals for a national minimum wage. We will grasp the opportunity to scrutinise those details.
We have come a long way in teasing out, in Committee, some of the less clear aspects of the Bill. It has been improved through an all-party contribution on new clause 1, relating to volunteers, for which we should all take credit.
The Bill will provide protection for the most abused sector of the working population—home workers. I am pleased that the Minister shares the concerns that I drew to his attention earlier about the exploitation of that particularly vulnerable employment sector.
Although we have reservations about the general application of a single national minimum wage, we shall not oppose the Bill's passage.

Mr. Pond: I am sad that I did not get a straight answer to my intervention in the speech of the right hon. Member for Wokingham (Mr. Redwood) about whether the Conservative party would plan, after all our debates, to repeal the National Minimum Wage Bill. I am even sadder that the right hon. Gentleman is no longer in the Chamber. However, the Leader of the Opposition is in the Chamber, and I should be happy to give way to him at any point in my speech if he would like to tell me whether the Conservatives plan to repeal the national minimum wage that we are introducing today.

Mr. Boswell: Will the hon. Gentleman give way?

Mr. Pond: No, I shall make a little progress—unless the hon. Gentleman will tell me whether the Conservatives would repeal the legislation, in which case I should be very happy to give way.

Mr. Boswell: Has it occurred to the hon. Gentleman that it will be reasonable to ask us whether we will repeal the Bill once the Government tell us what it is that we might or might not be invited to repeal? We do not know.

Mr. Pond: It was against my better judgment to give way.
In Committee, there was some confusion about whether Conservative Members had a hidden agenda in dealing with the Bill. The hon. Member for Daventry (Mr. Boswell) told us that there was no hidden agenda, but the hon. Member for Solihull (Mr. Taylor) told us that there was one—although he was not quite sure whose agenda it was. During the Committee stage, another hon. Member told us, very honestly, that the purpose of the Opposition's amendments to the Bill was to restrict the national minimum wage "as far as possible".
Conservative Members want to ensure—as their behaviour in the past few hours has been intended to ensure—that we do not have a national minimum wage in the United Kingdom. They still do not get it. do they? They do not understand that four out of five people in the United Kingdom are in favour of the national minimum wage, or that two out of three of those who still admit to being Conservative supporters—admittedly, numerically, there are not many of them—say that they favour a national minimum wage. Conservative Members continue to oppose the legislation. They do not understand that it is not only a matter of basic social justice but makes good business sense.
Opposition Members have told us in today's and yesterday's debates and in Committee that they are not in favour of sweated labour. In Committee, the hon. Member for Daventry told us that he had seen a sweatshop only in Romania. That might present a little challenge for his local press in Daventry—perhaps to discover whether they can uncover something that might look like a sweatshop. Every hon. Member will have to admit that, in the absence of a national minimum wage, we all have among our constituents people who are earning pitifully low pay.
While working at the Low Pay Unit, I saw at first hand, during 18 years of Conservative government, the effects of low pay. Although Conservative Members now tell us that they are not in favour of sweatshop economics, I saw at the sharp end the impact of their policies: abolition of

wages councils; and sweatshop economics which led us to a situation in which—as the Minister told us earlier in the debate; I, too, commend Ministers for their work on this Bill—pay inequalities in the United Kingdom are now wider than they were in 1886, when figures were first collected, and have increased faster than in any other industrialised country. That is part of the reason why, shamefully, the numbers of those in poverty in the United Kingdom trebled under the previous Administration.
Despite the enormous economic and social costs of the previous Government's policies, those policies have had no benefit. One might have thought, listening to the right hon. Member for Wokingham, that the sweatshop economics that the previous Government pursued have provided a nirvana of job creation and competitiveness. In fact, those policies created far fewer jobs for the nation than were created for countries that provided a decent level of pay and a minimum wage. We slipped down the competitiveness league, and eventually, in terms of national income per head, we were 1 1 th out of 15 member states of the European Union. If that is economic success, I would hate to see economic failure. We must take Opposition Members' arguments with a pinch of salt—or more appropriately, perhaps, with a salt mine. Their aim is to continue the discredited policies that we saw when they were in government.
Let me remind the House why we have sat here throughout the night to make sure that there is a national minimum wage. Let me give some examples that have recently been encountered by the Low Pay Unit, the organisation for which I used to work. An economics graduate is working for a firm of London solicitors for £1.75 an hour. An 18-year-old with NVQ 2, working in a private nursing home for adults with special needs in Yorkshire, earns f1.50 an hour. A 20-year-old employed as a stablehand in the east midlands earns 66p an hour.
We have sat here throughout the night, and we sat through two Committee sittings for more than 20 hours, to ensure that those people receive the decent minimum wage that they deserve. Let me remind the House why Opposition Members have sat here throughout the night. They have gone through the theatre—the fiasco—of pretending to scrutinise legislation, while going round and round, intervening on each other, to make sure that those people do not have the national minimum wage to which they are entitled. Labour Members will not let it happen.

Mr. Gale: I will be brief, because the hour is late. [HON. MEMBERS: "Early!"] It is late in the evening.
What we heard from the Minister was an unreconstructed rant from the 1970s. It was a time warp, returning us to the Trades Union Congress that we all used to know and loathe. The Labour party has clearly learnt nothing from those days. It has not learnt that, if people are to be paid more money, that money must be earned by the company concerned before it can be paid.
The Minister for Small Firms, Trade and Industry said in a disparaging speech that it did not matter, but of course it matters how much the figure is. We have sat here all night asking over and over again what that figure will be, but not one clone—not one radio pager—is prepared to tell Labour Members what to say.
The hon. Member for Gravesham (Mr. Pond) is not prepared to tell us how many Kentish jobs the Bill will cost, although he has been working on it for years in the


Low Pay Unit. We are told that we have been looking forward to this for 70 or 80 years, but no one is prepared to put a figure on it, and that is what matters.
I will vote against the Bill, because it will cost my constituents jobs. I came here to represent my constituents' interests, and I do not believe that it is in their interests to be put out of work by any meaningful figure. If the Minister tells us that it will not be a meaningful figure, I will say that we have wasted the entire night, and that some of my colleagues have wasted a great deal of time on the Bill. If it is to be a figure of the kind that has been bandied about in private on the Opposition Benches, industries and businesses in my constituency are very concerned indeed. As my right hon. Friend the Member for Wokingham (Mr. Redwood) said, there will be a ratchet effect. Wage costs will go up and up and up.
I represent a part of the south-east that has historically had high unemployment. I want my constituents to earn more: I want to see more money in their pockets, so that they can put more money into retail industries in my constituency. However, that money must be earned. I do not want an unrealistic wage, at whatever level, to be imposed on the seaside industries that I represent, on the agricultural workers and casual workers whom I represent or on those working in the toy industry7—a highly competitive industry, which is seeking to deal with overseas competition and costs that companies are already finding it very difficult to meet. If those people are to be put out of work by the Bill—as I believe they will—I would be doing them no favours by voting for it. If Labour Members are prepared to name a figure now, we shall know where we stand. If they are not, I fail to see how they can go into the Lobby in support of this nonsense.

Mr. Tam Dalyell: While the hon. Gentleman is on the question of naming, can he name the toy firms in his constituency?

Mr. Gale: I can and I am proud to do so. Hornby Hobbies is one of the most respected toy companies in the country. The managing director wishes to raise the wages of his employees. He is a new managing director who has turned the company round. It went into liquidation, it was bought out of liquidation and it recovered. It is a proud international name, but it is competing with assembly workers around the world. Good, part-time jobs employing my constituents are being sent overseas because British companies cannot compete with the wage costs.
If my constituents working for that firm will be placed out of work by the legislation, the Government and the legislation will be doing them no favours whatever. They, and Labour Members' constituents, will find that their jobs have gone and the small husband-and-wife businesses that were considering taking on a young person will work longer hours because they cannot afford to take on another employee. That is not creating work; it is destroying jobs and that is what the legislation and the Government will do.

Mr. Jim Murphy: It is good that the right hon. Member for Wokingham (Mr. Redwood) joined us this evening. It was good of him to set his alarm and wake from his slumber. It was good of him to slip his suit over his pyjamas, but it was very bad manners for him to nod off in the middle of his own speech. He has since sleep-walked back to his office, no doubt to prepare for the rest of his busy day. It is a shame that he is not in his place, but perhaps the hon. Member for Daventry (Mr. Boswell) will comment on what I have to say.
My hon. Friend the Member for Gravesham (Mr. Pond) asked the right hon. Member for Wokingham whether he would repeal the legislation, but the Opposition would not make a commitment three years in advance. I wonder whether that could be reconciled with other comments by the right hon. Member for Wokingham, who seemed perfectly eager and determined to comment in principle on opposing and repealing other legislation for a decade and beyond. I refer in particular to the European currency.
The Opposition lectured us on the impact on young people of a national minimum wage. That rhetoric does not fit well with an Opposition who objected to the single greatest job creation and opportunity enhancement project this century, in the shape of the new deal. We accept no lectures from them on opportunities for young people.
I have sat here throughout the debate this evening, and watched the Opposition pass the baton of filibustering from Back Bench to Front Bench and back again. It is now twenty minutes to 8 in the morning. It says something strange about the Chamber that this is the largest number of hon. Members that I have ever addressed, and that we are all gathered here at twenty minutes to 8 in the morning.
Although I feel a little jaded after listening to Opposition speeches throughout the night, I feel most sorry for my hon. Friend the Member for Eltham (Mr. Efford), who has been sitting here all evening waiting for the Adjournment debate on his local fire service. I feel equally sorry for the Minister who is waiting to reply to that debate. I wish my hon. Friend every success with his Adjournment debate.
I have a couple of quick comments, because I know that time is not an ally this morning. The hon. Member for Aldershot (Mr. Howarth) said that his town was the home of the armed forces, and that the Bill would bode ill for the people of Aldershot. Every constituency is the home of the armed forces, because we all have constituents in the forces. They will all be affected by the findings of the pay review body.
Like many hon. Members, I would have been affected by a national minimum wage in the past 18 years. I was affected by the Conservatives' repeal of the wages councils in 1993. Since then, I have worked night shifts, I have worked in shops and I have worked for very low wages. I bore the brunt of the previous Government's policies.
I do not accept the claim of Conservative Members that a minimum wage will lead to a reduction in the number of jobs, and will create unemployment. Again, I cite the Conservatives' record in government. In 1993, they abolished the wages councils, claiming that that would create jobs. The facts do not bear that out. Of course various economic circumstances have an impact on jobs, but let us examine one important fact: in the year before the abolition of the wages councils, nearly 18,000 new


jobs were created in this country; in the year after the abolition, that number went down to 5,000. The abolition of the wages councils did not have a positive impact on the level of unemployment.

Mr. Lansley: Does the hon. Gentleman accept that unemployment has gone down every month since 1993? Does he not attribute that to the economic policies of the previous Government, including labour market flexibility?

Mr. Murphy: No, I do not agree with the hon. Gentleman. There was a sharp reduction in job creation after the abolition of the wages councils. The Conservatives doubled the number of unemployed when they were in government. We shall not accept any lessons from the Conservatives on unemployment, because they failed to implement any programmes for change for the young unemployed, and failed to bring in a minimum wage—indeed, they did the opposite.
I welcome the comments of my hon. Friend the Minister earlier this morning, or late yesterday evening, on unfair dismissal. It is crucial that no one should be sacked or victimised for exercising their legal right to demand the national minimum wage. That right must be protected in law.
Much was said in Committee about benefits. One of the main reasons why I support the Bill is that we shall no longer have to subsidise low pay. Crucially, no longer will taxpayers have to subsidise employers who pay poverty wages to people who work long hours. No longer will we have to subsidise families who have the dignity of going to work, but then have to suffer the indignity of signing on to make up for their poverty wages.
Many of us sat up all evening listening to the debate, some of us participating in it. Many of the lowest-paid workers throughout the country work night shifts. One night shift in the House is an evening and morning well spent if, at the end, the scourge of poverty pay is ended for hundreds of thousands of people in every town and city throughout the country.

Mr. Hammond: One issue with which Ministers would have no difficulty in agreeing is that we have had an extensive debate on the Bill over the past few weeks. My right hon. Friend the Member for Wokingham (Mr. Redwood) summed up very eloquently the concerns we still have at the end of that debate.
The Government will, of course, get their Bill through; there has never been any doubt about that. That ought to be the end of story, but, because of the unusual structure of the Bill, there will be yet another chapter in the saga when the Low Pay Commission reports and Ministers come back to the House with the regulations, which, for the first time, will allow us to understand what the Bill means in substance. Those regulations will put flesh on the skeleton that is all we have before us at the moment.
The debate has been quite extraordinary. Although it has been extensive, the key piece of information has been missing—the piece that we all need to make any sense of the Bill. It is only when we obtain that vital piece of information—what the rate is to be—that we will be able to understand at last what the national minimum wage legislation really means.
Despite the Minister's uncharacteristically churlish opening remarks, the debate in Committee and on Report has, to a large extent, been good natured. Often, it has been constructive, and there has been a good deal of consensus across the Committee and the Floor of the House. Given that we stated on Second Reading our principled objection to the legislation, our objective in Committee was to try to improve the Bill. I hope that the Minister will accept that, if we have not always agreed, we have at least attempted to be constructive, and to suggest areas of concern as we have seen them in the practical operation of Bill.
The issues of principled objection remain, as well as many practical concerns about the detailed operation of the Act. We are convinced that the Bill will cost jobs, fuel inflation and damage public services. The degree of damage can be assessed and debated only when we have the vital missing pieces of information. Assuming that the Secretary of State accepts the Low Pay Commission's recommendations and puts them before the House in the form of regulations, we will finally have a chance to debate the issue on a fully informed basis. That debate may be more substantive than the debate that we have had over the past 100 or so hours, including proceedings in Committee and on Report.
I have been very brief, as is my wont. If I may, I would like to steal one of the Minister's favourite expressions. I do not feel that I am about to be parted from the National Minimum Wage Bill. It is more a case of au revoir, because I am sure that we will be visiting it again when the regulations come before us.

Mr. Healey: This Bill was badly needed, and is long overdue. It brings Britain into line—finally—with other modern economies, and gives us for the first time a national minimum wage. To borrow a well-worn phrase, the Bill is tough on low pay, and tough on the causes of low pay. The Bill will stop cowboy companies driving down wages and driving down standards in other workplaces. There is a strong correlation between low pay and low staff morale and motivation. There is a strong correlation between low pay and high rates of staff turnover. There is a strong correlation between low pay and low levels of training. Moreover, there is no future for this country in competing with the world's worst economies, when we must compete with the best.
For my constituents, the Bill may well be the most important piece of legislation we pass this Parliament. In Rotherham, between 1981 and 1991, we lost 12,000 coal and steel jobs, and gained 9,000 service sector jobs. Our employment structure and pay structure changed. Our economy is increasingly characterised by low-paid, part-time and temporary work.
Last year's jobcentre survey showed that half of all full-time vacancies paid less than £4 an hour, and that one in 10 paid less than £3 an hour. One man was so incensed by what he saw at the jobcentre that he ripped away one of the jobcentre cards and brought it to my surgery. It gave details of a £1.85-an-hour, six-day-week job for a security guard. [HON. MEMBERS: "Shame."] Those trends are mirrored throughout the country and the economy.
The aim of the Bill is simple: to achieve a universal national minimum wage. That principle was reiterated throughout the time in Committee, in the face of a stream


of amendments tabled by Conservative and Liberal Democrat Members, seeking to punch holes in that principle. They wanted variations by region, by sector and by occupation. They wanted variations by size of firm. The principle of a universal national minimum wage was reinforced tonight on Report, not least by the amendments we passed to prevent employers from penalising or dismissing employees as they move toward eligibility for minimum wage protection.
Many of my hon. Friends have worked in the employment field. We are familiar with those hire-and-fire employers who have been given freer and freer rein throughout the 1980s and early 1990s. We are familiar with their practice of firing people, days or weeks before they complete two years of employment and become entitled to protection from unfair dismissal. That is why the amendments on which we voted tonight were so important: they reinforced the basic principle of the Bill.
I look forward to the publication of the Low Pay Commission report in May. I am disappointed by the grudging recognition that Conservative Members have given to the work of the commission, which has done a thorough job, and will produce an authoritative set of recommendations. Conservative Members miss the point: the Low Pay Commission is part of an important policy and political process, which they fail to understand.
The Bill is a tribute to the Minister—and his work in opposition and in government—because he, and the Government, have moved employers to accept the principle of the national minimum wage, and then to become involved in helping to prepare plans to implement it, preparing the consensus on which the Bill and legislation relating to it must be based. That is why, in Committee, Conservative Members were bereft of the critical briefings and draft amendments that they might have expected, especially from employers' organisations.
Unions, too, have moved. They have moved to accept that a fixed formula is not the way ahead. They have moved to accept that they also must become involved in helping to prepare plans and achieve a consensus for the Bill's implementation. [Interruption.]

Mr. Deputy Speaker (Sir Alan Haselhurst): Order.

Mr. Healey: Those Conservative Members are the last of Britain's pressure groups that are unable to come to terms with the principle of the national minimum wage. They cannot come to terms with the fact that public opinion has left them behind. After 86 hours—

Mrs. Laing: rose—

Mr. Healey: After 86 hours in Committee and 15 hours on Report, I want to see the end of the national minimum wage being kicked around as a political football. I want to see the beginning of the national minimum wage as a permanent feature of the British economy as we move into the next millennium.

Mr. Lansley: After participating in the lengthy Standing Committee and the Report stage, I am grateful for the opportunity to say a few words on Third Reading.
I am glad that the Minister of State is here, because I suspect that he is a little like Queen Mary Tudor: that, when he departs—I pray many years hence—and they open him up, instead of "Calais", they will find "national minimum wage" written on his heart, so profound has been his commitment to it. I fear that, in the long run, like Queen Mary Tudor, he is committed to a lost cause. He may fight over it for generations, but in the long run he will lose it.
I did not get a chance to speak on Second Reading. Way back then, I thought that I would put my points in the debate, but would be willing to listen. The points that I intended to make were, first, that the academic evidence suggests that the minimum wage costs jobs, and, secondly, that it hits the unskilled and those without training and skills the hardest. The minimum wage does not merely set a floor—it is a floor with edges, and people fall off it. Some people are lifted up by it, but others fall off.
All those arguments came up in Committee, but time and again, rather than an attempt to respond with evidence and argument, all we had from Labour Members were assertions and bluster. They voted for the minimum wage, and they must have it. The terracotta army has been given its orders. It will march in the direction of the national minimum wage and do what it has to by the mandate presented to it, but not on the basis of evidence.
What deeply depressed me was that, from the point of view of the Government, the heart of the matter was that they wanted to lift people out of poverty by introducing the national minimum wage, yet the evidence from the Institute for Fiscal Studies and others was clear—that the minimum wage is a bad device to alleviate poverty. Often, it is directed not towards those in the lowest income groups, but towards the thousands of working partners, who are in households that are not particularly poor. The benefit of the minimum wage is greatest for the middle deciles by income, not the lowest. The beneficial effects that Ministers have suggested the national minimum wage would have on poverty simply are not there.
Ministers could have accepted that in Committee, and said that they wanted to make the minimum wage work better. They could have seriously debated the rate and, for example, home and agency workers, where there are abuses. Conservative Members recognise that abuses are committed by certain employers which have to be dealt with, and we engaged in that debate. However, Ministers would not provide information on which a serious debate could take place. Throughout, it was suggested that the minimum wage could be set at £3.50, £4 or £4.50. Who was to know where it was to be set? We introduced amendments designed to set a ceiling on the level, but the Government would not accept them.
Now the Government argue that business organisations accept the national minimum wage. I have represented business organisations, and I can tell the House that they accept that the Government are going to have their Bill—just as Conservative Members know they will. At the risk of repeating myself from another debate—it applies here just the same—

Mr. Jim Fitzpatrick: Will the hon. Gentleman give way?

Mr. Lansley: No, because time is short—[Laughter.] As the hon. Gentleman knows, in 100 hours I gave way


every time anyone asked me. In Committee, his colleagues were told never to give way. I remember the number of times that I stood up and had to sit down again because they would not give way.
I must tell the Minister that, just because Labour Members kow-tow to the emperor, that does not mean that he is wearing any clothes. When the time comes, he will see. It will not be a pretty sight—we will find that the Minister wears no clothes.

Mr. Boswell: I may have spent 100 hours in Committee and on Report closely associated with the Minister, but he leads me irresistibly to think of Lenin, who asked the essential question, "Who, whom?" Even given the time that we have spent in our deliberations, some very important questions have not been answered—Ministers have fallen over backwards to avoid answering them. We have been told no national minimum wage rate, no details of the coverage of remuneration, no specification of pay reference periods and no details of the mechanism of uprating. At the end of 100 hours, we simply do not know the answers.
Every time that there has been a difficulty—for example, as recently as the one in the debate on honoraria—the matter is referred magically to the Low Pay Commission. The Government have been a blend of Lenin and the fairy godmother.

Mr. Fitzpatrick: Will the hon. Gentleman give way?

Mr. Boswell: No, I shall not give way, as I have a number of points to make and I have been giving way for 100 hours.
The Government have not been able to run away from the overall economic difficulties that will arise because of the Bill. The Confederation of British Industry has continued to point out that, even if the rate was set as low as —3 an hour, there would be problems if differentials were not compressed. It is also concerned about record keeping and the reversal of the burden of proof.
Such concerns are echoed especially in the more vulnerable parts of the private sector—hospitalities, charities, horticulture and remote businesses and industries. Less explicitly, concerns have also been expressed about the impact on the public sector, particularly caring.
At the end of this amazing process we are left, as others have said, with Hamlet without the prince—we still have not elicited that elusive rate. We have at least secured the publication of the Government's advice to the Low Pay Commission, although not until 600 other bodies and individuals had given it evidence. We do not have Hamlet, but we do have the first grave-digger.
It would have been much better if the Low Pay Commission—given that the Government were going to create it anyway—had been invited to take evidence, deliberate and report. Ministers could have decided at what rate they wanted the minimum wage to be set and the other details—which will eventually have to be put into regulations—and then brought them to the House as the full monty, for a proper set of debates.
Instead, the Bill has been conducted most extraordinarily. In Committee, we debated the sittings motion on the first day, but we did not sit on the following

Thursday afternoon. The week after that, one debate was curtailed when Labour Members moved the closure, which the Opposition voted against, as we wanted to debate the Bill. Then the Afrika Korps rolled into town and tried to steamroll the Bill overnight. Labour Members should have known that my hon. Friends were made of sterner stuff. They had many points of substance to raise and, my goodness, they raised them.
Given that the Bill seemed only to be an enabling Bill, it is amazing that it has had to be so heavily amended—by both the Opposition and the Government. It would have been much wiser to have allowed more time for the remaining stages.
I have learnt in Committee and on Report that, in addition to the general economic case against the Bill, which has been so well deployed by my right hon. Friend the Member for Wokingham (Mr. Redwood), we have been left with enhanced worries about the way in which the Bill will operate in practice. My hon. Friends and I are still extremely unhappy about how it will affect charities, although the provisions are now considerably better than those that were first proposed. We are deeply disappointed about therapeutic earnings. We remain concerned about record keeping, enforcement and penalties. The Agricultural Wages Board is left with a gross untidiness, and there is real anxiety about double employments, well exemplified by Mr. McSporran of Gigha, who had 14 jobs at once.
There is real concern about spouse employments. Governments are ill advised to start regulating the economic or any other relations between spouses. There is uncertainty about the commission. Above all, there is uncertainty about whether the under-26s will have a lower rate or a training rate and whether others will join them.
All that uncertainty arises because of the complexity of a modern economy, to which the Government have not alerted themselves. There are more things in heaven and earth than are dreamt of in their philosophy. The Government have tried to fit a modern economy into a narrow and constricting mould.
Of course there is a political attraction for Ministers in choosing one rate. If only the real world were so simple. The Government are learning. First, they had to exempt the armed forces. There has been no explicit information, but it is clear that they have completely filleted the Bill. By destroying its universality, they have destroyed its integrity.
The essential moral equivocation of the Bill, which we pointed out in the very first Committee sitting, remains and will remain at least until the rate is stated and any exemptions or lower rates for the under-26s are revealed.
The choice is simple. If the national minimum wage is set at a safe rate dictated by the Chancellor of the Exchequer, it will not make much difference. The result will be political disillusionment among Labour Members. It would have been far better to adopt the Opposition's approach of a minimum income.
If, alternatively, the minimum wage is set at a high rate—say £4 an hour or more, which would still be well below the £4.60 that would be consistent with Labour's previous election pledge—it will damage significant sectors of the economy, including, for example, the care sector and tourism, which are great generators of jobs. Through the effect on differentials, it will run the risk of cranking up wage-cost inflation. The evidence from


Incomes Data Services only this week is that it is already doing so. All that is the natural result of a Government whose policies are driven by soundbites: the louder they sound, the more their policies turn out to bite. Ministers have, throughout this extraordinary consideration of the Bill, been strong on rhetoric and weak on answers. The damage to jobs comes later.
We have been implacably opposed to the Bill all along. We sought, and modestly achieved, certain improvements in Committee, but we remain implacably opposed to the Bill and will shortly have the pleasure of voting to decline it a Third Reading. There it is.

Mrs. Roche: As I said consistently in Committee and throughout this evening, we have had a full and interesting debate. It is good that we can do so. 1 must, however, say to the hon. Member for Daventry (Mr. Boswell), for whom I have some regard, that his last gesture, in throwing down a copy of the Bill, was petulant.
The Conservative party has learnt nothing and forgotten nothing. It has not learnt the lessons of 1 May. It has not learnt that the policy of a national minimum wage is deeply popular. The Conservatives say that they want no minimum wage—yet. They say that they want a high-wage economy—but not yet. They say that they want economic efficiency and partnership—but not yet.
I am extremely and eternally grateful to the team who have worked with us in Committee to bring about the national minimum wage. I know that my hon. Friend the Minister of State will agree that it has been one of the great experiences of our parliamentary lives to work with such a wonderful and dedicated team and to have the support of our right hon. and hon. Friends this evening.
Conservative Members may sneer but, for all Labour Members, this Bill is why we came into politics, why we joined the Labour party and why we are proud to be part of this Government.

Mr. John Home Robertson: I join other hon. Members in congratulating my hon. Friend and her team on the work they have done on this important Bill. She mentioned teamwork, but has she received any information about the attitude of the Scottish and Welsh nationalists to the Bill? I have not seen them tonight. Do they support the Bill?

Mrs. Roche: I am deeply disappointed that the Scottish and Welsh nationalists are not here, because the Bill will introduce a national minimum wage that will bring great benefits throughout the United Kingdom.
I wish to emphasise the intention behind the Bill, in case anybody is still mystified. The Bill is part of the Government's overall employment relations strategy, which aims to encourage greater adaptability at work, a greater sense of partnership in the workplace and decent minimum standards of fairness at work for all, enforceable in law. In our Third Reading debate this evening, we have heard passionate contributions—I make no apology for describing them as passionate—from my hon. Friends the Members for Lincoln (Gillian Merron), for Gravesham (Mr. Pond), for Eastwood (Mr. Murphy) and for

Wentworth (Mr. Healey), who all talked from their experience about what poverty wages mean to the men and women whom they represent.
What have we heard from the Conservatives? We have heard the same old stories. They made the same arguments that they made when equal pay for women was debated. They claimed that equal pay legislation would mean a reduction in jobs for women. In reality, women's employment increased overall. The Conservative party has learnt nothing and forgotten nothing, and that is typical.
The Conservatives have told us that small firms will suffer. They are so unambitious for the small firms in our country which do so much work for our economic wealth. The Conservatives deem small firms second class, but the small firms will not forget what they have done. The Conservatives were rejected by the small firms. Indeed, the hon. Member for Chesham and Amersham (Mrs. Gillan), who speaks on small firms for the Opposition, has said that her party had failed to make the arguments. She also said, with admirable honesty, that the Conservatives would produce no policy on small firms in the future because they had got it so wrong in the run-up to the election. Why should we listen to them?
The minimum wage has both a business and a social justification. If I may borrow a phrase from my hon. Friend the Minister of State, it is an idea whose time has come. The Bill has the simple aim of providing a wage floor, set by the Government, below which workers cannot be paid. That is a simple idea, but it has thrown up a vast number of issues—as the length of our debates bears witness.

Mr. Fitzpatrick: I am grateful to my hon. Friend for giving way, especially as two Conservative Members had opportunities to give way but declined them. I can only imagine that that is a measure of their last-ditch efforts to defend the previous Administration's policy of creating a low-skill, low-wage economy in this country. Does my hon. Friend agree that this policy is central to our new Government's social exclusion policy which will treat British workers with dignity? The creation of a national minimum wage is long overdue. It is testimony to the difference between Conservative Members, who treated the British people with contempt—

Mr. Deputy Speaker: Order. The hon. Gentleman must not attempt to make a speech on an intervention.

Mrs. Roche: I understand well the points that my hon. Friend made. What Aunt Sallies the Conservative party has put up. The hon. Member for Daventry—this was not worthy of him—was worried that there were terrible enforcement measures. Where did they come from? They are, of course, based on previous enforcement provisions enacted by the Government in which he served as a Minister, as did the right hon. Member for Wokingham (Mr. Redwood). They said nothing about draconian enforcement then. The Conservative party has learnt nothing and forgotten nothing.
I look forward to the progress of the Bill in another place. We will watch its deliberations. I remain confident that there will be a good debate there, despite the confusion and complications spread by the Opposition. The minimum wage is above all a practical measure


designed to deliver to the people we represent. It is about people who are held down and treated unfairly. It is about company managers who need, and wish, to be free from the fear that a competitor will undercut them by recruiting a desperate labour force. The Conservative party's opposition to the Bill shows how out of touch it is with business. The Bill is a practical, hard-headed business measure, but it is practicality and hard-headedness with justice and fairness thrown in.
When the Bill becomes an Act, as it surely will, it will take its proper place alongside the other landmark legislation introduced by previous Labour Administrations. When my political life and awareness began, I looked at those past Labour Administrations with great admiration. They influenced my young life. This will take second place only to the setting up by a Labour Government of the national health service, whose anniversary we will celebrate this year. What more fitting tribute than to wish the Bill's passage well. I commend it to the House.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 214, Noes 124.

Division No. 194]
[8.16 am


AYES


Ainger, Nick
Davies, Rt Hon Ron (Caerphilly)


Ainsworth, Robert (Cov'try NE)
Davis, Terry (B'ham Hodge H)


Allen, Graham
Dawson, Hilton


Ashdown, Rt Hon Paddy
Dismore, Andrew


Atkins, Charlotte
Dobbin, Jim


Austin, John
Donohoe, Brian H


Barnes, Harry
Doran, Frank


Beard, Nigel
Drew, David


Benn, Rt Hon Tony
Eagle, Angela (Wallasey)


Benton, Joe
Eagle, Maria (L'pool Garston)


Berry, Roger
Efford, Clive


Best, Harold
Ennis, Jeff


Blears, Ms Hazel
Etherington, Bill


Bradshaw, Ben
Field, Rt Hon Frank


Brown, Rt Hon Nick (Newcastle E)
Fitzpatrick, Jim


Browne, Desmond
Fitzsimons, Lorna


Burden, Richard
Flynn, Paul


Burgon, Colin
Follett, Barbara


Campbell, Ronnie (Blyth V)
Foster, Michael Jabez (Hastings)


Canavan, Dennis
Foster, Michael J (Worcester)


Casale, Roger
Foulkes, George


Caton, Martin
Gardiner, Barry


Cawsey, Ian
Gerrard, Neil


Chapman, Ben (Wirral S)
Gilroy, Mrs Linda


Chaytor, David
Godsiff, Roger


Chidgey, David
Goggins, Paul


Clapham, Michael
Gordon, Mrs Eileen


Clark, Paul (Gillingham)
Griffiths, Jane (Reading E)


Clarke, Eric (Midlothian)
Grocott, Bruce


Clelland, David
Hain, Peter


Coaker, Vernon
Hall, Mike (Weaver Vale)


Coffey, Ms Ann
Hamilton, Fabian (Leeds NE)


Coleman, Iain
Hancock, Mike


Colman, Tony
Hanson, David


Corbett, Robin
Healey, John


Corbyn, Jeremy
Hepburn, Stephen


Cox, Tom
Heppell, John


Crausby, David
Hesford, Stephen


Cryer, John (Hornchurch)
Hill, Keith


Cunningham, Jim (Cov'try S)
Hinchliffe, David


Dalyell, Tam
Hoey, Kate


Davey, Valerie (Bristol W)
Home Robertson, John


Davidson, Ian
Hoon, Geoffrey


Davies, Rt Hon Denzil (Llanelli)
Hope, Phil


Davies, Geraint (Croydon C)
Hopkins, Kelvin





Howarth, George (Knowsley N)
Pickthall, Colin


Hoyle, Lindsay
Pike, Peter L


Hughes, Ms Beverley (Stretford)
Plaskitt, James


Humble, Mrs Joan
Pollard, Kerry


Hutton, John
Pond, Chris


Iddon, Dr Brian
Prentice, Gordon (Pendle)


Jackson, Ms Glenda (Hampstead)
Primarolo, Dawn


Jamieson, David
Prosser, Gwyn


Jenkins, Brian
Purchase, Ken


Jones, Helen (Warrington N)
Quinn, Lawrie


Jones, Jon Owen (Cardiff C)
Rammell, Bill


Kennedy, Jane (Wavertree)
Rapson, Syd


Khabra, Piara S
Reed, Andrew (Loughborough)


King, Andy (Rugby  Kenilworth)
Reid, Dr John (Hamilton N)


King, Ms Oona (Bethnal Green)
Roche, Mrs Barbara


Lawrence, Ms Jackie
Rooney, Terry


Laxton, Bob
Rowlands, Ted


Leslie, Christopher
Ruane, Chris


Levitt, Tom
Russell, Ms Christine (Chester)


Lewis, Ivan (Bury S)
Savidge, Malcolm


Liddell, Mrs Helen
Sawford, Phil


Linton, Martin
Sedgemore, Brian


Livingstone, Ken
Sheerman, Barry


Livsey, Richard
Singh, Marsha


Lock, David
Skinner, Dennis


Love, Andrew
Smith, Angela (Basildon)


McAllion, John
Smith, Miss Geraldine (Morecambe  Lunesdale)


McAvoy, Thomas
Smith, John (Glamorgan)


McCabe, Steve
Soley, Clive


McCafferty, Ms Chris
Southworth, Ms Helen


McCartney, Ian (Makerfield)
Spellar, John


McDonnell, John
Squire, Ms Rachel


McFall, John
Steinberg, Gerry


McNulty, Tony
Stewart, David (Inverness E)


McWalter, Tony
Stewart, Ian (Eccles)


Mallaber, Judy
Stoate, Dr Howard


Mandelson, Peter
Stringer, Graham


Marek, Dr John
Stuart, Ms Gisela


Marsden, Paul (Shrewsbury)
Sutcliffe, Gerry


Marshall, David (Shettleston)
Taylor, Rt Hon Mrs Ann (Dewsbury)


Marshall—Andrews, Robert
Thomas, Gareth (Clwyd W)


Merron, Gillian
Todd, Mark


Michael, Alun
Touhig, Don


Michie, Bill (Shef'ld Heeley)
Truswell, Paul


Milburn, Alan
Turner, Dennis (Wolverh'ton SE)


Miller, Andrew
Turner, Dr Desmond (Kemptown)


Mitchell, Austin
Tyler, Paul


Moran, Ms Margaret
Vis, Dr Rudi


Morgan, Rhodri (Cardiff W)
Walley, Ms Joan


Morris, Ms Estelle (B'ham Yardley)
Wareing, Robert N


Mountford, Kali
White, Brian


Mudie, George
Wicks, Malcolm


Mullin, Chris
Williams, Alan W (E Carmarthen)


Murphy, Denis (Wansbeck)
Williams, Mrs Betty (Conwy)


Murphy, Jim (Eastwood)
Winnick, David


Naysmith, Dr Doug
Wise, Audrey


Norris, Dan
Wood, Mike


O'Brien, Bill (Normanton)
Woolas, Phil


O'Hara, Eddie
Wright, Anthony D (Gt Yarmouth)


O'Neill, Martin



Organ, Mrs Diana
Tellers for the Ayes:


Osborne, Ms Sandra
Mr. Clive Betts and


Pearson, Ian
Mr. Kevin Hughes.


Pendry, Tom



Perham, Ms Linda



NOES


Ainsworth, Peter (E Surrey)
Bottomley, Peter (Worthing W)


Amess, David
Brady, Graham


Ancram, Rt Hon Michael
Brazier, Julian


Arbuthnot, James
Brooke, Rt Hon Peter


Atkinson, David (Bour'mth E)
Bruce, Ian (S Dorset)


Baldry, Tony
Burns, Simon


Bercow, John
Cash, William


Beresford, Sir Paul
Chapman, Sir Sydney (Chipping Barnet)


Boswell, Tim







Chope, Christopher
Maples, John


Clappison, James
Maude, Rt Hon Francis


Clark, Rt Hon Alan (Kensington)
Mawhinney, Rt Hon Sir Brian


Clark, Dr Michael (Rayleigh)
May, Mrs Theresa


Clarke, Rt Hon Kenneth (Rushcliffe)
Moss, Malcolm


Clifton—Brown, Geoffrey
Nicholls, Patrick


Collins, Tim
Norman, Archie


Cormack, Sir Patrick
Ottaway, Richard


Cran, James
Page, Richard


Curry, Rt Hon David
Paice, James


Davies, Quentin (Grantham)
Pickles, Eric


Davis, Rt Hon David (Haltemprice)
Prior, David


Duncan, Alan
Randall, John


Duncan Smith, Iain
Redwood, Rt Hon John


Evans, Nigel
Robathan, Andrew


Faber, David
Robertson, Laurence (Tewk'b'ry)


Fallon, Michael
Roe, Mrs Marion (Broxbourne)


Flight, Howard
Rowe, Andrew (Faversham)


Forth, Rt Hon Eric
Ruffley, David


Fowler, Rt Hon Sir Norman
St Aubyn, Nick


Gale, Roger
Sayeed, Jonathan


Garnier, Edward
Shephard, Rt Hon Mrs Gillian


Gibb, Nick
Shepherd, Richard


Gill, Christopher
Simpson, Keith (Mid-Norfolk)


Gorman, Mrs Teresa
Soames, Nicholas


Gray, James
Spelman, Mrs Caroline


Greenway, John
Spicer, Sir Michael


Grieve, Dominic
Spring, Richard


Gummer, Rt Hon John
Steen, Anthony


Hamilton, Rt Hon Sir Archie
Streeter, Gary


Hammond, Philip
Swayne, Desmond


Heald, Oliver
Syms, Robert


Heathcoat—Amory, Rt Hon David
Tapsell, Sir Peter


Hogg, Rt Hon Douglas
Taylor, Ian (Esher  Walton)


Horam, John
Taylor, John M (Solihull)


Howarth, Gerald (Aldershot)
Taylor, Sir Teddy


Jack, Rt Hon Michael
Townend, John


Jenkin, Bernard
Trend, Michael


Johnson Smith, Rt Hon Sir Geoffrey
Tyrie, Andrew


Key, Robert
Viggers, Peter


Kirkbride, Miss Julie
Walter, Robert


Laing, Mrs Eleanor
Wardle, Charles


Lait, Mrs Jacqui
Waterson, Nigel


Lansley, Andrew
Wells, Bowen


Letwin, Oliver
Whitney, Sir Raymond


Lewis, Dr Julian (New Forest E)
Whittingdale, John


Lidington, David
Widdecombe, Rt Hon Miss Ann


Lloyd, Rt Hon Sir Peter (Fareham)
Willetts, David


Luff, Peter
Winterton, Mrs Ann (Congleton)


MacGregor, Rt Hon John
Winterton, Nicholas (Macclesfield)


MacKay, Andrew
Woodward, Shaun


Maclean, Rt Hon David
Yeo, Tim


McLoughlin, Patrick
Young, Rt Hon Sir George


Malins, Humfrey
Tellers for the Noes:



Sir David Madel and



Mr. Stephen Day.

Question accordingly agreed to.

Bill read the Third time, and passed.

DELEGATED LEGISLATION

Mr. Deputy Speaker (Sir Alan Haselhurst): With permission, I shall put together the Questions on the three motions.

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

URBAN DEVELOPMENT

That the draft London Docklands Development Corporation (Transfer of Functions) Order 1998, which was laid before this House on 21st January, be approved.

That the Urban Development Corporations in England (Area and Constitution) Order 1998, dated 19th January 1998, a copy of which was laid before this House on 27th January, be approved.

LOCAL GOVERNMENT

That the draft Local Authorities (Transport Charges) Regulations 1998, which were laid before this House on 9th February, be approved.—[Mr. Jamieson.]

Question agreed to.

Orders of the Day — Road Traffic Reduction (United Kingdom Targets) Bill [Money]

Queen's recommendation having been signified—

Motion made, and Question proposed,
That, for the purposes of any Act resulting from the Road Traffic Reduction (United Kingdom Targets) Bill, it is expedient to authorise the payment out of money provided by Parliament of any expenses of the Secretary of State which are attributable to the Act.—[Mr. Jamieson.]

Mr. Eric Forth: The next few items on the Order Paper are important, and the House will want to give them proper consideration. They are money resolutions and Ways and Means resolutions following from private Members' Bills. [Interruption.]

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. Would right hon. and hon. Members who are not staying to listen to the debate please leave as quickly and as quietly as possible out of courtesy to the right hon. Member for Bromley and Chislehurst (Mr. Forth)?

Mr. Forth: These matters require to be considered by the House. They are in no sense automatic or trivial. There is an increasing trend for private Members' Bills to give rise to the expenditure of a large amount of taxpayers' money. That would be bad enough, but a trend that is well exemplified by the measure before the House is also contained in the following measures, as we shall see when we examine them.
Clause 3 of the Road Traffic Reduction (United Kingdom Targets) Bill states:
There shall be paid out of money provided by Parliament any expenses incurred by the Secretary of State under or by virtue of this Act.
That is the clue to what we are being asked to do in this measure as in other measures relating to, let us remember, private Members' Bills. We are being asked to sign a blank cheque, and we are given no estimate of the amount that will require to be expended in pursuance of this private Member's Bill.
We must get some idea from the Minister of how much of the money is already being spent in the Department on the items that are covered by the Bill. I suspect that some of them are fairly easy to justify. Clause 2(3)(a) refers to "emissions of greenhouse gases;" those are almost certainly dealt with already within the Department. However, it might be useful for us to be given some idea of the cost of that. Similarly, other items in clause 2 such as "effects on air quality" are probably already covered. Clause 2(3)(c)refers to "effects on health". That is a broad category and we must know more about it.

Mr. Nicholas Soames: Does my right hon. Friend agree that, as in the matter of greenhouse gases, which covers many strands of policy, the health issue will cover not only the Department of the Environment, Transport and the Regions, but the Department of Health? Would not it be appropriate to have a Health Minister in the House to explain in detail the extent of the overlap, what it costs and how it is administered?

Mr. Forth: I am grateful to my hon. Friend for raising that matter. I intended to deal with it later, but I shall deal

with it now because it gives rise to a problem. Perhaps there is a defect in the money resolution arising from the issue that my hon. Friend raises. The money resolution states:
for the purposes of any Act resulting from the Road Traffic Reduction (United Kingdom Targets) Bill, it is expedient to authorise the payment out of money provided by Parliament of any expenses of the Secretary of State".
I assume that that means the Secretary of State for the Environment, Transport and the Regions, because that is the logical conclusion, but, perhaps as a result of the items in the Bill that give rise to the money resolution, other Secretaries of State may be required to spend extra money in pursuance of the Bill's requirements.
Perhaps the money resolution is defective in that regard or inadequate. I assume that the reference in the money resolution is to the Secretary of State for the Environment, Transport and the Regions, but perhaps the Minister will clarify that. We need to be reassured that if the Bill becomes an Act, all the items will somehow be covered by just one Department and one Secretary of State. In that case, to refer again to my hon. Friend's point, how can the effect on health be properly dealt with by the Secretary of State for the Environment, Transport and the Regions without any contribution by the Secretary of State for Health?
Clause 2(3)(d) is probably simpler than those to which I have referred because it refers simply to "congestion". I assume that that is not a bodily congestion, which might be a health matter, but traffic congestion, although it does not say that. We are being asked to accept that the Secretary of State will prepare a report on the adverse impact of road traffic congestion. That is a complex matter, and perhaps it has already been dealt with in the Department. The House will wish to know from the Minister about each of these headings and about how far the Department is already dealing with these matters.

Mr. Andrew Rowe: My right hon. Friend is on an important point. My county council, for example, has ascertained that the second largest cause of traffic congestion is the journey to school. One of the consequences of that is that the council is seriously considering policy changes that will directly affect the budget of its local education authority. Therefore, the money resolution may be defective in that, as far as I can see, it makes no reference to costs falling on other Government Departments as a direct consequence of the attempt to reduce congestion.

Mr. Forth: I am grateful to my hon. Friend. He has again anticipated what I was going to say. I am obviously so predictable—

Mr. Soames: On a point of order, Mr. Deputy Speaker. May I draw your attention to the hon. Member for Leeds, East (Mr. Mudie), the Deputy Chief Whip, who is forcing Labour Members to leave the Chamber against their wishes, like underpaid and underfed sheepdogs? Do you agree that this legislation is important and deserves the scrutiny of the House? The hon. Member seems to think that, merely by driving new Members who are keen to please him out of the Chamber, that will stop my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) and me examining in some detail the issues that are before us. I tell the Deputy Chief Whip that it


will not alter the position in any way if we have to speak to an empty House, except for the admirable and distinguished Minister. We will go on speaking because we believe that this is worthy of examination.

Mr. Deputy Speaker: Whether hon. Members remain in the Chamber is not a matter for the occupant of the Chair.

Mr. Soames: Further to that point of order, Mr. Deputy Speaker. This is a serious point. It is not whether hon. Members remain or not, but whether they are being told to leave the Chamber by the Deputy Chief Whip. He went up to them and said, "Go," and a very obedient group of ladies who were keen to please him left with their tails between their legs. Is that not monstrous?

Ms Joan Walley: Further to that point of order, Mr. Deputy Speaker. As someone who has just come into the Chamber because of the matter that we are discussing, may I put it on the record that I have sat with my hon. Friend the Member for Leeds, East (Mr. Mudie), the Deputy Chief Whip, and he said nothing of the sort? May I make it clear that those of us who, unlike the hon. Member for Mid-Sussex (Mr. Soames), to my knowledge, have sat through all the proceedings of the Bill—

Mr. Deputy Speaker: Order. I repeat: this is not a matter for the occupant of the Chair. This is a brief debate and I suggest that we proceed with it.

Mr. Forth: Indeed. I do not want to prolong my remarks because many of my hon. Friends wish to make a contribution, about which I am glad. My hon. Friend the Member for Faversham and Mid-Kent (Mr. Rowe) had anticipated the point that I wished to cover and it is important. I was going to skip forward to clause 2(3)(g), which has the heading "other social impacts", which is the broadest possible term that one can imagine.
I have worked out that one of the aims of road traffic reduction must inevitably involve the item that has come to cause so much congestion: the transport of young children to school by their parents, which is an important part of traffic. If the Bill, were it to become an Act, will reduce that element, those children will have to get to school somehow. My hon. Friend the Member for Faversham and Mid-Kent has made a crucial point.

Mr. Soames: To follow up the point that was made by my hon. Friend the Member for Faversham and Mid-Kent (Mr. Rowe), by extension, there is no reference anywhere in the money resolution to the apportionment of money that will be required to undertake the survey. Clearly, the Department of the Environment, Transport and the Regions has its own mechanisms for doing traffic surveys. It will, I am sure, subcontract them to county and district councils. Surely in this case, councils will need to be repaid for their work in subcontracting that business from the Department.
Will my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) turn his mind to that and also tell us what he believes will be the impact on the Bill of European legislation on greenhouse gases?

Mr. Forth: My hon. Friend makes very important points. One of them, certainly in the context of the money

resolution, is how far we can identify the costs arising from the Bill's requirements—that is the first question that must be answered. The second involves the apportionment of the costs not only across several Government Departments, but, as we have now identified, across local government. As my hon. Friend said, local government may well be involved in the surveys to underpin the reports that will be required under the Bill.
It has also been pointed out that additional transport costs may well fall on local authorities that have to transport to school children who would otherwise be taken by their parents, but who will be discouraged from doing so if the Bill becomes law.

Mr. Jonathan Sayeed: As the money resolution leaves everything to the Secretary of State, and given the Government's propensity to give more money to urban than to rural authorities, is it not likely that money will be taken from rural authorities and given to urban authorities? Yet rural authorities have a much greater need to transport children long distances, by road, to school.

Mr. Forth: My hon. Friend makes a crucial point. One of the difficulties—I was about to say nonsenses, but I will say difficulties at this stage—inherent in the whole business of a seductive-sounding Bill to make further provision for road traffic reduction targets, is that if the targets are to be meaningful, they will have to be highly discriminatory between rural and urban traffic, to use the broadest possible terms.
The targets would have to identify the elements of traffic that were to be reduced in an ideal world, according to the sponsors of the Bill. That requires a high level of differentiation which I think will be difficult, and therefore expensive and complex. Following on from that will be all the implications of the flows of finance across Departments, from the Government down to local authorities, in an undoubtedly discriminatory way. The Bill would be used to justify a further skewing of support for local authorities away from rural areas, where the congestion is almost certainly less—although we do not know that yet because the surveys have not been carried out—and towards the urban areas.
My hon. Friend the Member for Mid-Bedfordshire (Mr. Sayeed) made a crucial point, which illustrated the extent to which an apparently seductive and attractive Bill, to which many hon. Members wanted to attach their names because it sounded so good—

Mr. Soames: My right hon. Friend has, as usual, and in his own seductive way, got to the core, the heart, indeed the nub of the Bill. This Bill commands considerable support. I have received a large number of letters from my constituents in favour of it. I do not know whether my right hon. Friend has had the same experience.
However, what we are seeking to do is not something that may or may not be popular, in public terms, in relation to what may or may not be a good piece of legislation. It is our job to analyse the money resolution


and decide whether it goes totus porcus. Does my right hon. Friend agree that, within the money resolution, there should be—

Mr. Deputy Speaker (Mr. Michael Lord): Order. That intervention is far too long.

Mr. Forth: I think that I am grateful to my hon. Friend for what he said. I hope that he will try to catch your eye, Mr. Deputy Speaker, to expand on the interesting concept that he has just introduced to the debate. Perhaps the term that he has just used leads us on to the question of biodiversity. I suspect that it does. I am not sure that I know what biodiversity means, and I certainly do not know what it means in the context of the Bill.
We are being asked to vote money to support a Bill that tasks the Secretary of State for the Environment, Transport and the Regions to produce a report involving targets for the effect of traffic on land and biodiversiy. That goes rather wide of what any of us might have imagined would be in a Road Traffic Reduction (United Kingdom Targets) Bill.
I can understand references to greenhouse gases or to the European context, to which we must return later. I can also understand references to air quality, health, congestion, danger to other road users and other social impacts—under which I had intended to deal with the point about schools. However, I really am struggling when it comes to understanding "land and biodiversity".

Mr. David Maclean: Will my right hon. Friend allow me?

Mr. Forth: Yes, of course.

Mr. Maclean: As one of those who was at Rio and negotiated the original treaty, I can say that biodiversity is the wealth of our wildlife. My right hon. Friend will be aware that, in the context of this Bill, less wildlife would be squashed by car tyres if there were less traffic on country roads. I assume that that is the meaning of that provision in the Bill.

Mr. Forth: I am grateful to my right hon. Friend. I thought that he might come to my rescue on the matter. However, in helping me, he has given rise to another thought: yet again in one word—biodiversity—is contained implications that, one might well imagine, could lead to considerable costs in the Department of the Environment, Transport and the Regions in working out how many items of squashed wildlife were involved, to provide a target, or the implications of targeting, for the Bill's broad purposes.

Mr. Rowe: My right hon. Friend may be unaware that when my hon. Friend the former Member for Basingstoke—Sir David Mitchell—was a Transport Minister, one of the achievements of which he was proudest was his authorisation of construction of underpasses for some of the busiest roads in Britain, to enable hedgehogs, badgers and otters to cross roads.

The cost was absolutely enormous. It may well be that, in trying to protect our nation's biodiversity, we are being asked to sign an enormous cheque.

Ms Walley: On a point of order, Mr. Deputy Speaker. No Opposition spokesman is on the Opposition Front Bench, as Opposition Front Benchers are absolutely dissociating themselves from this farce.

Mr. Deputy Speaker: That is not a matter for the Chair.

Mr. Forth: Indeed, Mr. Deputy Speaker, we are debating private Members' legislation. It is therefore entirely appropriate that the House, as a collection of private Members, should consider the Bill, which is exactly what we are doing.
At this point, I shall have to introduce a tiny element of discord into my comments—which I shall soon draw to a close, as I suspect that colleagues would like to speak. I am not sure that I agree with the comments just made by my hon. Friend the Member for Faversham and Mid-Kent—but only to the extent that he assumes that the Bill's provisions might give rise to a need to provide more tunnels for hedgehogs to cross roads so that they are not squashed. I understand his reasoning, but I approach the matter from a different angle, and am perhaps keeping more faith with the Bill.
The Bill states that we want to attempt to reduce traffic, which will be done through targets, reports, surveys and investigations. We may consequently reduce the need for hedgehog tunnels under roads to the extent that traffic is reduced, as there would be less risk of hedgehogs suffering from traffic. I therefore have to disagree with my hon. Friend the Member for Faversham and Mid-Kent, but only in that respect.

Mr. Soames: Is my hon. Friend aware that the National Federation of Badger Groups—the groups exist across the country—is one of the prime sources of information—[Laughter.]

Mr. Deputy Speaker: Order. I remind the House that we are debating a serious matter.

Mr. Forth: It is a very serious matter, and I can only assume that, in his comments, my hon. Friend the Member for Mid-Sussex (Mr. Soames) is taking me back to biodiversity. His comments also dealt with the comments made by my right hon. Friend the Member for Penrith and The Border (Mr. Maclean). Furthermore, I suspect that there is probably the odd squashed badger and hedgehog to attest to the truth of my hon. Friend's comments.

Mr. Soames: I was trying to make a serious point. The National Federation of Badger Groups, which is the architect of much of the work that was mentioned by my hon. Friend the Member for Faversham and Mid-Kent (Mr. Rowe), would be able to help the hon. Member for Stoke-on-Trent, North (Ms Walley) in her task. The groups are manned by volunteers who love badgers, and who would be quite prepared to do such a count for free.
Nevertheless, does my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) agree that the type of research work that will have to be done to get a


detailed feel for the total impact of traffic congestion on wildlife, let alone on human beings, would be an extremely costly measure, and that that cost should be far more clearly stated in an order?

Mr. Forth: Of course my hon. Friend is right. Let me, however, draw his attention to a provision in clause 2(2):
The Secretary of State is not obliged to specify targets … if he considers that other targets, or other measures, are more appropriate for the purpose of reducing the adverse impacts of road traffic".
That would worry me somewhat, but subsection (2) goes on to say:
but in that case the report must explain his reasoning and include an assessment of the impact of the other targets or other measures on road traffic reduction.
In some ways, I am encouraged by that. At least it provides a degree of flexibility in the Bill, which I am sure that we all welcome. But it opens up the prospect of further costs, because the work involved in examining whether "targets or other measures" are involved will be considerable.

Mr. Sayeed: I shall be delighted if I can save my right hon. Friend from being badgered by my hon. Friend the Member for Mid-Sussex (Mr. Soames).
May I ask my right hon. Friend a serious question? There is no specification about the amount of money involved. We are not told where it will come from. Is there not a considerable danger that, in such a money measure, the money will be taken from other very necessary and very admirable causes?

Mr. Forth: My hon. Friend makes an important point, which underpins the debate and gives me an opportunity to wind up my remarks.
We are being asked the same thing, not just here but in subsequent business that we must submit to the same degree of scrutiny. We are being asked it for the same reason. In all these cases, a private Member's Bill, having been passed, is submitted to a money motion—something which, as I recall, rarely occurred some years ago, but is now a matter of routine because nearly all private Members' Bills seem to involve considerable expenditure.
We are asked to nod such motions through, because they come after the main business and are assumed to be matters in which we should not take much interest. But—for the reason given by my hon. Friend the Member for Mid-Bedfordshire—we should take at least as much interest in them as we do in most other matters. They involve the expenditure of taxpayers' money, and therefore may well involve—if we believe the Chancellor's claim that he will keep a tight rein on public expenditure as a whole—our old friend "choices and priorities".
My hon. Friend is right. Given that the Bill may become an Act and impose on this Secretary of State—or several Secretaries of State—additional expenditure, we really must know what other items of expenditure will be forgone by the Government in order to give effect to its provisions. Until I am much more satisfied than I am now, I am loth to give my consent.

Mr. Nicholas Soames: I wish, very briefly, to support the views expressed by my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth).
My mind goes back to the days when my party was in power. In those days, Bob Cryer and the hon. Member for Bolsover (Mr. Skinner) always contested money motions, to the great advantage of the House of Commons. Even after a long sitting to which a number of hon. Members on both sides of the House have contributed, we should not necessarily give the nod to a measure just because it is 8.50 am, and let a money motion sail through the House.
One of the most distinguished things about Bob Cryer—in a long and not undistinguished parliamentary career—was his devastating ability, on almost every Bill, to speak fluently for up to 45 minutes. I always used to stay to listen to him, because he was so good at what he did. He was a pleasure to hear, and I for one miss him greatly. I am delighted that he sent the House such a fine wife and such a splendid son, and I am surprised not to see them here this morning. The hon. Member for Bolsover assures me that Bob Cryer's son is a chip off the old block, and I am disappointed that he is not here to support us this morning in holding this high-handed, arrogant, big-headed Government to account.
The main points that I want to make about the motion are connected with public expenditure, as one would expect, and particularly, with clause 2(3), which states:
In preparing the report the Secretary of State shall have regard to the adverse impacts of road traffic, including
paragraphs (a) to (g). As my right hon. Friend the Member for Bromley and Chislehurst said, they are extremely onerous charges, particularly with regard to the impact of emissions of greenhouse gases, given the appalling road traffic congestion.
In my constituency of Mid-Sussex and in my old constituency of Crawley, some of the roads running through that very prosperous and beautiful part of the world are, as the Minister knows, absolutely jammed solid every morning.

Mr. Rowe: My hon. Friend may be unaware of one of the interesting elements of social impact as, only relatively recently, Age Concern informed me that something like 60 per cent. of women above a certain age have never had a driving licence. As the Government are preoccupied with social exclusion, gender equality and so on, it must be within their targets to enable women who are excluded by the absence of a driving licence to have one. That suggests that there should be more rather than fewer cars. Therefore, the requirement in the Bill that every year the Secretary of State should publish a report aimed at looking at the social impact of traffic reduction would have to take that into account, too. It would have to be wide-ranging and potentially very expensive.

Mr. Soames: My hon. Friend is completely right. Such a project would indeed be onerous.
I am a 90s man. I am equipped, chiselled and born to be part of the cutting edge of the 1990s. As we move towards the millennium, I feel very much part of contemporary times, but even I do not feel that it is right, and nor do I have the courage, to speculate as to why fewer women than men have driving licences. It would not be sensible for a Conservative Member to do that.


I have my own theories, but I could not repeat them in the House of Commons. Nevertheless, the survey proposed by my hon. Friend would be extremely costly.
The effects on air quality represent vast possible expense. My right hon. Friend the Member for Penrith and The Border (Mr. Maclean) was a delegate at the Rio convention. Because of my admiration for him and my dedication to conservation and the preservation of wildlife, I have always carried around with me a little piece of paper that my right hon. Friend gave me with the Rio declaration printed on its centre pages.
I am sure that some of my hon. Friends remember our late lamented colleague, the former Member for Watford, now Lord Garel-Jones, who sadly, was translated into another place. We all remember that he used to carry around in his pocket a list of the cads in my party who voted against various pieces of Government legislation. I do not do that. I am a 90s man. I carry round in my pocket the Rio declaration. Some of my hon. Friends will find that very strange. They will think, "What is that fellow Soames carrying around? He is not into eating bats' droppings and stuff. He is a proper person." However, I carry around the Rio declaration. I would urge the Minister to study the Rio declaration with care if she intends to bring before the House of Commons onerous legislation that imposes the most extraordinary and expensive demands on God knows who. We are not told who will pay for any of it.

Mr. Sayeed: The taxpayer.

Mr. Soames: Yes, but we are not told which taxpayer. We are not told whether it will be the county council, the district council or central Government. How will the county councils be repaid? How will the National Federation of Badger Groups be reimbursed for all its work?

Mr. Forth: I can help my hon. Friend. The resolution says:
it is expedient"—
ha, ha—
to authorise the payment out of money provided by Parliament of any expenses of the Secretary of State which are attributable to the Act.
Members of Parliament are being asked to sign a blank cheque for the Secretary of State, which may carry tax implications for all citizens, to support the rather greeny aspirations of the Bill.

Mr. Soames: We certainly are. My right hon. Friend is correct. We are signing a blank cheque. Clause 2(3)(a) to (g) shows enormous potential costs. The clause says:
In preparing the report, the Secretary of State shall have regard to the adverse impacts of road traffic, including
the measures listed in paragraphs (a) to (g).
Principle one of the Rio declaration is:
Human beings are at the centre of concerns for sustainable development.
Who could disagree with such a splendid aspiration? Sentence two is:
They are entitled to a healthy and productive life in harmony with nature.

Living in harmony with nature in 1998 is not cheap. Most of us do not live in harmony with nature. My right hon. Friend the Member for Bromley and Chislehurst lives in harmony with nature. My right hon. Friend the Member for Kensington and Chelsea (Mr. Clark) certainly does—he is an expert, a champion of wildlife and conservation and a forward-thinking conservator. My hon. Friend—what is your seat, Chope?

Mr. Christopher Chope: Christchurch.

Mr. Soames: My hon. Friend the Member for Christchurch (Mr. Chope) is a living example of someone who lives in harmony with nature, but it is not cheap. The list in the Bill includes emissions of greenhouse gases, effects on air quality and effects on health. When we consider the vast number of illnesses known to be caused by traffic congestion and the awful build-up of pollution and smog, we have to ask how the Secretary of State, in conjunction with the Department of Health, will pull together all the statistics. Will that not be a hugely costly operation?

Mr. Nigel Evans: Does my hon. Friend agree that, while nobody could fail to support the main thrust of the Bill, the problem is in clause 3? It says that
There shall be paid out of money provided by Parliament any expenses incurred by the Secretary of State under or by virtue of the Act.
My local authority could have duties placed on it by the Secretary of State. It is having a 12 per cent. increase in council tax this year—three times the rate of inflation. Because of the lack of detail on who will pick up the tab on each of the requirements of the Bill, it could be extremely expensive.

Mr. Soames: My hon. Friend raises an important point. There is just a whimper of opposition to us. No Labour Member is rising to debate the idea that the Secretary of State for the Environment, Transport and the Regions should be given a blank cheque—a blank cheque—at a time of great public expenditure restraint, to undertake a survey, which, in my judgment and that of my right hon. and hon. Friends, will cost millions of pounds.
The Minister will chastise those of us who have sought to give a little more examination to the issue, saying that we are mobbing the issue up. We are not. We are dealing with a very important question. In the old days, when Bob Cryer was in the House, every money resolution was examined, to the embarrassment of my Government, in the most formidable way, with support from other Labour Members. What do we hear today from the Labour poodles? There is not a word from the running dog lackeys of the Labour Whips. All we hear is silence. We could be in the Chinese assembly for all the riot and disorder that we are hearing. Look at them giggling and laughing. We hear not a word—not a word. They are cutting single-parent benefit; they are cutting here there and everywhere; they are sticking to the most vigorous and robust public expenditure policies, attainable only by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), who laid the preparations for the Labour Government, which are so good that they are sticking to them. What do we hear from them: not a word on the prospect of the Secretary of State being given a blank cheque.
I hope that the Minister will, in a detailed exposition, set out with absolute clarity every penny that she expects to spend in the furtherance of this—I am sure—admirable private Member's Bill. The House has a right to know; the House needs to know—if we do not hold it to account, who will—how much the Bill will cost.

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Glenda Jackson): I trust that I will not disappoint the hon. Member for Mid-Sussex (Mr. Soames). I was not going to castigate him; I was going to sympathise with him.
The House has become used to the naked ambition that is invariably displayed by the right hon. Member for Bromley and Chislehurst (Mr. Forth), whose desire to be restored to that cabinet of shadows is such that, at the behest of his Whips, he will walk into the House at any hour of the day or night to speak on any subject that they put in front of his nose with the same lack of seriousness of approach.
In this debate, we saw a move in the ambition stakes. We were privileged to see the first run of a new Little and Large—the Little and Large of the House of Commons—featuring the right hon. Member for Bromley and Chislehurst and the hon. Member for Mid-Sussex. I say with all generosity to both the right hon. Gentleman and the hon. Gentleman that, although I appreciate their desire to entertain the House and their motives in paying absolutely no attention to an extremely serious Bill and the money resolution which the Bill requires before it can be put on the statute book, their act needs a great deal more rehearsal.
We were privileged to hear from Conservative Members a litany of disapproval of the money resolution, which is vital to a Bill which is surely vital to the country's health and well-being. The right hon. Members for Bromley and Chislehurst and for Penrith and The Border (Mr. Maclean) and the hon. Members for Faversham and Mid-Kent (Mr. Rowe), for Mid-Sussex, for Mid-Bedfordshire (Mr. Sayeed) and for Ribble Valley (Mr. Evans) all stood up to express their deep concern about what they perceived to be a blank cheque in the money resolution on the Road Traffic Reduction (United Kingdom Targets) Bill. There was not one word from them on the costs that are already being incurred by the failure of their Administration for 18 long years to do anything about reducing road traffic or to introduce any policy which would have brought about some form of integrated transport.
Conservative Members are expressing concerns about the mayhem that is being wrought on wildlife, particularly in rural areas, yet they formed the Government who privatised buses, which reduced the services running in rural areas, and who privatised railways, which has reduced any kind of public transport in those areas virtually to nil or to that which is totally useless to the people who need it. One cannot say that one is surprised. As my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody)—regrettably, she is not in the Chamber—would say, their brass neck on any subject beggars belief.
The money resolution covers the eventuality of any expenses arising for the Secretary of State which are attributable to the Bill. Such expenses might include the cost of commissioning surveys. As the hon. Member for Ceredigion (Mr. Dafis), the Bill's promoter, said on Second Reading:
The economic costs of congestion are enormous—between £15 billion and £20 billion.
That figure is from the Confederation of British Industry. The hon. Gentleman went on:
Maddison and Pearce put the cost higher than that in the study, 'The True Costs of Road Transport'".
The effect on health, which particularly concerned some Opposition Members, is also directly linked to an ever-increasing number of vehicles on our roads and the inevitable pollution of the air that we breathe.

Mr. Rowe: On a point of order, Mr. Deputy Speaker. I wonder whether you have had any intimation from the promoter of the Bill that he would not be present when his Bill was being discussed. Is it not a normal courtesy of the House that, when something as important as the money resolution relating to a private Member's Bill is being discussed, the private Member whose Bill it is, is present?

Mr. Deputy Speaker: That is not a matter for the Chair.

Ms Glenda Jackson: Thank you, Mr. Deputy Speaker. I am certain that the hon. Member for Ceredigion did not think that any Member of the House would speak against the money resolution. The Bill had all-party support. It has cross-party sponsorship. The Bill will bring massive improvements to the health and well-being of people in this country. [Interruption.] I have already pointed out to the hon. Member for Ribble Valley, who, from a sedentary position, said that he wished to know how much the money resolution would cost, that the existing cost to the country of congestion on our roads is estimated to be between £15 billion and £20 billion.
On Second Reading, the hon. Member for Ceredigion said:
A recent Department of Health report says:
'We have clearly underestimated the true overall effects of air pollution."'—[Official Report, 30 January 1998; Vol. 305, c. 622.]

Mr. Soames: I want the hon. Lady to break the habit of a lifetime and give a straightforward answer to the following question. She is asking the House of Commons to vote through on the nod a money resolution which says:
There shall be paid out of money provided by Parliament any expenses incurred by the Secretary of State under or by virtue of this Act.
I understand that the hon. Lady regards it as an impertinence for anyone to question her about anything to do with the payment of public funds, but will she now tell the House how much the Bill will cost? That is the purpose of the debate. She has not been here very long; she is not familiar with the ways of the House. If she were familiar with them, she would not have started her speech in the impertinent manner that she did. Will she now answer the question—how much money is she inviting us to—

Mr. Deputy Speaker: Order. There is no need to personalise the debate in this way.

Ms Jackson: Thank you, Mr. Deputy Speaker, but I thought it was quite touching. The hon. Gentleman could not keep his own argument together. First, he asked whether I would break the habits of a lifetime; then he said that I had not been in this place very long. Then he said that I regarded requests from everyone as an impertinence. I say to him in all honesty, it is only his requests that I regard as an impertinence because his approach to the money resolution, and to the Bill, has been to attempt to treat the whole thing as a farceȔindeed, to present himself as a farceur to the House. He may have the build for it, but he certainly does not have the timing.
There are concerns, some of which were expressed by Conservative Members, on the issue of health. The hon. Member for Ceredigion said on Second Reading that the Department of Health report says:
the deaths of between 12,000 and 24,000 people a year are 'brought forward'
and that
Children, the elderly and the poor suffer most.
He also said:
According to Dr. Ian Roberts of the child health monitoring unit at Great Ormond Street Hospital for Sick Children, more than 6 million children are at risk because of the volume of traffic on our roads."—[Official Report, 30 January 1998; Vol. 305, c. 622–23.]

Mr. Forth: Instead of quoting the absent promoter of the Bill, will the Minister simply tell us whether she does, or does not, know how much the Bill would cost her Department were it to become an Act? It would help us enormously if we were given even that much information. If she could give us an estimated figure, that would be even more helpful, but if she simply told us, as a matter of open government, whether she knows what the Bill is likely to cost—

It being three quarters of an hour after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 52 (Money resolutions and Ways and Means resolutions in connection with Bills):—

The House divided:— Ayes 150, Noes 11.

Division No. 195]
[9.13 am


AYES


Ainsworth, Robert (Cov'try NE)
(Chipping Barnet)


Ashdown, Rt Hon Paddy
Corbett, Robin


Atkins, Charlotte
Cox, Tom


Austin, John
Cryer, John (Hornchurch)


Beard, Nigel
Cunningham, Jim (Cov'try S)


Benton, Joe
Dafis, Cynog


Best, Harold
Dalyell, Tam


Betts, Clive
Davey, Valerie (Bristol W)


Blears, Ms Hazel
Davies, Rt Hon Denzil (Llanelli)


Boateng, Paul
Davies, Rt Hon Ron (Caerphilly)


Bottomley, Peter (Worthing W)
Davis, Terry (B'ham Hodge H)


Bradley, Keith (Withington)
Dawson, Hilton


Brand, Dr Peter
Dismore, Andrew


Breed, Colin
Drew, David


Brown, Rt Hon Nick (Newcastle E)
Drown, Ms Julia


Browne, Desmond
Efford, Clive


Burgon, Colin
Ennis, Jeff


Butler, Mrs Christine
Fatchett, Derek


Campbell, Menzies (NE Fife)
Field, Rt Hon Frank


Casale, Roger
Fitzpatrick, Jim


Cawsey, Ian
Follett, Barbara


Chapman, Sir Sydney
Foulkes, George





Gardiner, Barry
Morgan, Rhodri (Cardiff W)


George, Andrew (St Ives)
Mudie, George


Gerrard, Neil
Murphy, Jim (Eastwood)


Gibson, Dr Ian
Norris, Dan


Gilroy, Mrs Linda
O'Brien, Bill (Normanton)


Goggins, Paul
Olner, Bill


Griffiths, Jane (Reading E)
Organ, Mrs Diana


Grocott, Bruce
Osborne, Ms Sandra


Hain, Peter
Pendry, Tom


Hall, Mike (Weaver Vale)
Perham, Ms Linda


Hancock, Mike
Pickthall, Colin


Hanson, David
Pike, Peter L


Harris, Dr Evan
Pollard, Kerry


Healey, John
Primarolo, Dawn


Hepburn, Stephen
Prosser, Gwyn


Hesford, Stephen
Purchase, Ken


Hinchliffe, David
Quinn, Lawrie


Home Robertson, John
Rapson, Syd


Hoon, Geoffrey
Rendel, David


Hopkins, Kelvin
Robinson, Geoffrey (Cov'try NW)


Howarth, George (Knowsley N)
Roche, Mrs Barbara


Hughes, Ms Beverley (Stretford)
Rooney, Terry


Hughes, Kevin (Doncaster N)
Ruane, Chris


Humble, Mrs Joan
Russell, Bob (Colchester)


Iddon, Dr Brian
Ryan, Ms Joan


Jackson, Ms Glenda (Hampstead)
Sanders, Adrian


Jenkins, Brian
Savidge, Malcolm


Johnson, Miss Melanie (Welwyn Hatfield)
Sheldon, Rt Hon Robert


Kennedy, Charles (Ross Skye)
Singh, Marsha


King, Andy (Rugby  Kenilworth)
Skinner, Dennis


Leslie, Christopher
Smith, Miss Geraldine (Morecambe  Lunesdale)


Levitt, Tom
Soley, Clive


Linton, Martin
Starkey, Dr Phyllis


Livsey, Richard
Stewart, Ian (Eccles)


Lloyd, Tony (Manchester C)
Stoate, Dr Howard


Love, Andrew
Stuart, Ms Gisela


McAvoy, Thomas
Taylor, Rt Hon Mrs Ann (Dewsbury)


McCabe, Steve
Thomas, Gareth R (Harrow W)


McCafferty, Ms Chris
Touhig, Don


McCartney, Ian (Makerfield)
Turner, Dennis (Wolverh'ton SE)


McDonnell, John
Tyler, Paul


McFall, John
Walzley, Ms Joan


Maclean, Rt Hon David
Webb, Steve


McNulty, Tony
White, Brian


McWalter, Tony
Williams, Mrs Betty (Conwy)


Mallaber, Judy
Winnick, David


Mandelson, Peter
Winterton, Ms Rosie (Doncaster C)


Marek, Dr John
Wise, Audrey


Marshall—Andrews, Robert
Wood, Mike


Michael, Alun
Woolas, Phil


Michie, Bill (Shef'ld Heeley)
Wright, Anthony D (Gt Yarmouth)


Michie, Mrs Ray (Argyll  Bute)



Milburn, Alan
Tellers for the Ayes:


Miller, Andrew
Jane Kennedy and


Mitchell, Austin
Mr. Graham Allen.


Moran, Ms Margaret



NOES


Atkinson, David (Bour'mth E)
Lloyd, Rt Hon Sir Peter (Fareham)


Chapman, Sir Sydney (Chipping Barnet)
Rowe, Andrew (Faversham)


Clark, Rt Hon Alan (Kensington)
Simpson, Keith (Mid-Norfolk)


Clarke, Rt Hon Kenneth (Rushcliffe)
Soames, Nicholas


Gummer, Rt Hon John
Wells, Bowen


Hogg, Rt Hon Douglas
Tellers for the Noes:



Mr. Eric Forth and



Mr. Jonathan Sayeed.

Question accordingly agreed to.

Resolved,
That, for the purposes of any Act resulting from the Road Traffic Reduction (United Kingdom Targets) Bill, it is expedient to authorise the payment out of money provided by Parliament of any expenses of the Secretary of State which are attributable to the Act.

Orders of the Day — Shooters Hill Fire Station

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Kevin Hughes.]

Mr. Clive Efford: I have waited nearly 12 hours to deliver my speech. Now that the deliberate attempts by Conservative Members to talk out this Adjournment debate have collapsed, we can get to the serious issue of the threatened closure of Shooters Hill fire station.
I thank my hon. Friend the Minister for the way in which he has approached the issue and for taking considerable time to discuss it with a delegation that came to his office to make representations against the closure. I recently received a letter from him that set out the criteria by which he will make his decision. He said that the matter had been widely publicised, that the authority had considered it properly, and that the fire service inspectorate had given its opinion that national standards of fire cover would be maintained. I have placed in the internal mail of the House 1,100 letters to my hon. Friend, collected over the weekend, to underline the strength of feeling on the issue in my constituency.
I hope to demonstrate through that correspondence and through this debate that the London Fire and Civil Defence authority does not meet the criteria that my hon. Friend set out in his letter to me. Why do we bother to consult the local community around a fire station such as Shooters Hill if we do not take people's representations seriously and make them aware of the proposals? Is the consultation designed merely to satisfy the wider public, away from the immediate vicinity, or is it a genuine attempt to address local people's serious concerns?
When we were elected, the credibility and standing of politicians were at a low ebb. One of the Government's tasks must be to restore that credibility, so we must treat consultation exercises seriously and not leave people feeling that they are nothing but a sham.
The LFCDA's decision was based on a consultation process that started in December 1995 and ended on 31 January 1996. The resulting document was considered at a meeting of the authority's policy and resources committee on 8 February, and then at a full meeting of the authority on 22 February. Given that the consultation started only in December, that Christmas intervened and that the closing date was 31 December, the process may not have been sufficient.
Furthermore, the local authority was asked on 21 December for its comments. I do not have to point out to my hon. Friend the Minister that that was unreasonably close to Christmas. Even worse, the local authority was asked to consult all the local groups, so it would have had to circulate the LFCDA's proposals, receive the comments and return them by the closing date at the end of January. That was clearly insufficient time.
My hon. Friend the Member for Erith and Thamesmead (Mr. Austin), who was then the hon. Member for Woolwich where the fire station is situated, also made representations against its closure. He wrote to the chair of the LFCDA and to the Secretary of State. He also initiated an Adjournment debate on the subject on 9 February 1996. A further debate on fire services was held on 13 March, which my hon. Friend the Minister will recall, as he took part in it.
Given that so much attention was paid to the issue in the House, which is only across the river from the headquarters of the LFCDA, the Minister will be surprised to learn that the objections raised by my hon. Friend the Member for Erith and Thamesmead were not recorded in the report to the LFCDA, which was made on 22 February. The council met on 15 February and passed a letter to the authority on 16 February. Its objections were also not recorded in the report that was sent to the authority on 22 February. The consultation arrangements were wholly inadequate, and I know that the chief executive of the London borough of Greenwich has written this week to the authority to make that point.
The LFCDA's decision to close Shooters Hill fire station, taken this week, is based on the consultation that took place in December 1995 and January 1996. That consultation was flawed because it did not accurately record the objections. Although some of them were received later than the closing date of 21 January, they were in time to be considered at the meeting of the authority on 22 February.
More important, as I have said, the decision has been based on that consultation. Because the objections of the local council and the Member of Parliament were not known and the consultation with local people was not sufficient, none of the objections is recorded in the current report before the LFCDA. Therefore, its decision is flawed.
The report that went to the LFCDA in October 1997, and led to the decision to close Shooters Hill fire station, did not take account of any developments in the area. For instance, it did not consider the development along the waterfront from Deptford to Thamesmead. It did not address the Creekside development, the Woolwich dockyard, the Royal Arsenal or the development at Thamesmead. It did not even consider the imminent development at the Queen Elizabeth II hospital.
I am sure that hon. Members will be surprised to learn that the report made no mention of the millennium experience, which will have 75,000 visitors on peak days and 35,000 visitors on non-peak days. The transport infrastructure that has been put in place—the docklands light railway and the Jubilee line extensions—was also not considered. All those developments may be subject to special measures, but they will still have an impact on the fire cover for the local area. Each time the issue has been raised with the LFCDA, it has claimed that it will not affect its ability to meet Home Office-recommended response times. That might be the case if the response times are measured from point A—the fire station—to point B or the location of the incident. Given the expansion and development in the area, that decision does not take account of the possibility that point C might need attention at the same time that the fire station is dealing with point B. That aspect is causing great concern in the local community.
I suggest that members of the LFCDA did not have all the facts before them when the decision was taken. For that reason, the report was flawed. It did not record the opposition of the council or the MP. The Minister cannot consider that public consultation was adequate and, therefore, the subsequent decision based on that was flawed and, I believe, challengeable. It also said that there was no need for reconsultation because there had been no significant developments. I have been told by the LFCDA that its decision is out of time for a challenge,


but I suggest that there are significant grounds, as the section 19 request has not been granted yet by the Minister.
Local people fear that the service is being shaped by financial considerations. The 1995 Audit Commission report, "In the Line of Fire", referred to pensions and warned of the extreme financial pressure that would be placed on fire services throughout the country. Local people worry that their fire station is being closed not because of rationalisation of the service but because of financial constraints. That puts local people and property in danger. They are also concerned that too much emphasis is placed on property rather than people in calculating response times and the ability of the fire service to cover an area.
People feel that the assumptions made in the report to the LFCDA in October are woefully inadequate and that the failure of the previous consultation, and the failure to report honestly the concerns that were raised by the local authority and Member of Parliament, have seriously called into question other assumptions that were made in the report. Those are genuine feelings of concern in my constituency. I suggest that the Minister cannot grant the section 19 request of the LFCDA.

Mr. Nigel Beard: My hon. Friend the Member for Eltham (Mr. Efford) has outlined the anxiety of people who believe that the millennium experience, with its car parks and increased traffic, will distract fire cover from residential calls. That is part of the background to the debate.
There is no doubt that the closure of Shooters Hill fire station is driven by difficulties with the London fire and Civil Defence Authority's pension funds. Were there no such difficulties, I doubt whether the closure would have arisen. This year's financial settlement in increasing support to the LFCDA has recognised the difficulty, but the LFCDA decided to use the extra money not to avoid shutting the station but to overcome the imbalance in its pension fund this year. It feels that, without some guarantee of the future, it has a fiduciary duty this year and subsequently to ameliorate the imbalance.
I recognise that the LFCDA operates within the rules laid down for it, but it is wrong for London's fire cover anywhere to be influenced or determined by the exigencies of the pension fund. I accept the Minister's assurances that provision, even with the closure of Shooters Hill fire station, will meet national minimum standards. Why, however, should cover above minimum standards be determined not by the appraisal of fire risks but by the number of firemen who have been injured and had to retire early, a bulge in past recruitment that is causing a retirement bulge now and the fact that firemen live longer in retirement than was anticipated when the actuarial foundations of the fund were laid? To accept those factors as legitimate influences on fire cover in south-east London is tantamount to accepting that, within limits, cover is determined by chance.
That cannot be a sound or acceptable basis on which to administer public service and recruit public confidence. I should like to make three requests of the Minister: to set aside the proposal to close Shooters Hill fire station; in the meantime, to urge the LFCDA to use the cash it has to overcome this year's pension difficulties; and to review

the fire brigade pension arrangements and produce a lasting solution to an endemic problem in time for next year's settlement.

Mr. John Austin: My hon. Friend the Member for Eltham (Mr. Efford) has clearly set out how he feels the consultation was flawed in the way in which the decision was taken. He has just handed to me a copy of the LFCDA report that went to the committee on 2 February 1996. It refers to the fact that 267 responses, excluding petitions, had been received. In fact, the leader of the fire authority told my hon. Friend that 900 responses were received. I responded to the authority in writing, which was acknowledged by the leader of the authority on two occasions and I submitted an objection from the police consultative committee in Greenwich, but none of that was reported at the time to the authority.
The main concern is the area represented by my hon. Friend around Shooters Hill, but the fire station covers not only its own ground, but surrounding areas. It is in the centre, surrounded by Woolwich, Plumstead, Eltham, Lee Green, Bexley, East Greenwich and Sidcup fire stations—all of which, with the exception of Plumstead, are one-appliance stations. If Shooters Hill station were to close, it would mean that, whenever two appliances were called out, whether on a two-fire or a one-fire call, there would be an entire sector left without cover.

Mr. Jim Fitzpatrick: May I draw my hon. Friend's attention to the fact that there are several Labour Members here who are concerned about the future of the London fire service, but there is not a single Opposition Member present?

Mr. Austin: I note my hon. Friend's comments.
My hon. Friend the Member for Eltham commented on the effect on the wider area. The following structures are on the major incidents plan involving Shooters Hill fire station: Eltham palace, the A102 motorway, the Blackwall tunnel, the Thames barrier, Erith oil works, Charlton Athletic's football ground, the Valley, the millennium site and all the developments that have taken place along the waterfront since the report was received.
The speed with which an appliance arrives on the scene of a fire is vital to safety, not only for the occupants of the buildings, but for the firefighters themselves, because their lives are at risk when their arrival is delayed. I shall quote some examples, which I know the Minister has, because I sent them to him. -When there was a fire at Eastcote primary school, the first appliance arrived in five minutes, the second in seven; for a fire at Long Walk housing office, the first arrived in three minutes, the second in seven; for a fire in Shooters Hill itself, the first arrived in four minutes, the second in seven; for a fire in Warland road in Plumstead, the first arrived in four minutes, the second in seven; for a fire in Elmdene road, the first arrived in three minutes and the second in six. If Shooters Hill fire station had been closed, I doubt whether those areas would have got even one appliance within 10 minutes.
I shall compare two incidents: the first took place when Shooters Hill had two appliances and the second when it had only one. Six years ago, there was a fire in Rowton


road, and four people had to be rescued from upstairs bedrooms. The crew worked well: they passed the people on to the second crew, who carried out first aid and essential resuscitation. All four survived.
Two years later, when Shooters Hill had only one appliance, there was a serious fire in Llanover road. Again, the crews worked magnificently and did all they could, but four children did not survive. I cannot say with any certainty that, if there had been two appliances at Shooters Hill, those children would have lived, but there is a nagging question in the mind of everybody living in the area—what would have been the outcome if that cut had not been made?
My hon. Friend the Member for Bexleyheath and Crayford (Mr. Beard) referred to the pension provision. The Minister will know that 1 raised that matter during the debate on the Queen's Speech in 1994 and in the debate on the fire services. I acknowledge that the Minister has been as good as his word. This year's fire settlement, with the additional cash for the fire and civil defence authority, was the best settlement in years. I do not believe that when the Minister gave that extra money he expected it to be stashed away in the reserves: he expected it to be spent on fire cover for the people of London, and that is what we expect.

The Parliamentary Under-Secretary of State for the Home Department (Mr. George Howarth): I congratulate my hon. Friend the Member for Eltham (Mr. Efford) on securing the debate. The House will admire his patience in sitting through the night to raise this issue of importance to his constituents.
I am pleased that firefighters in London have decided against taking industrial action on the proposals to change fire cover in London. Whatever their motive, such action would have had the most costly and damaging consequences for Londoners.
I fully understand the concerns of hon. Members and their constituents about the quality of their local fire service. That was emphasised again last week when I met my hon. Friend with my hon. Friends the Members for Erith and Thamesmead (Mr. Austin) and for Bexleyheath and Crayford (Mr. Beard), both of whom have contributed to the debate. They were with a delegation of residents from the area served by Shooters Hill fire station, who expressed their concerns about the proposed closure of the station. My hon. Friends and their constituents made it clear that they take this issue very seriously.
The fire service is a local authority service. Statutory responsibility for providing an efficient fire service rests with the local fire authority. In the case of Shooters Hill, that is the London Fire and Civil Defence Authority. It is for the authority to keep its fire cover provision under review and to set its budget at such a level that will allow it to discharge its statutory responsibilities.
It is important for the House to know that the proposal to close Shooters Hill fire station—and, indeed, the Barbican station—has its origins in a fire cover review by the London fire brigade. The aim of the review was to ensure that fire cover was provided on a strategic basis, deploying all the brigade's resources in the most effective

and efficient way. It recognised, in particular, that appliances at any individual fire station were not the only resources available to that locality.
On section 19 applications, the legislation provides safeguards to ensure that statutory responsibilities continue to be met. Section 19(4) of the Fire Services Act 1947 requires that a fire authority cannot reduce the numbers of fire stations, fire appliances and firefighting posts without the express consent of the Home Secretary, who has a specific role in considering section 19 applications. He grants approval only if he is satisfied, first, that the proposals have been sufficiently widely publicised, in sufficient detail and with adequate time to enable any interested party to make representations; secondly, that representations have been considered by the fire authority; and, thirdly, on the advice of Her Majesty's inspectorate of fire services, that the national standards of fire cover will be maintained.
There is no statutory right of consultation, but the existing guidance makes it clear that the Home Secretary considers it desirable that there should be appropriate consultation.
My hon. Friend the Member for Eltham dealt in some detail with the consultation arrangements made by the authority. That is primarily a matter for the authority, but the consultations on the fire cover review were extensive: 194 bodies were consulted, including hon. Members, MEPs, London boroughs, staff associations and others. The authority is itself a representative body made up of 33 members drawn from each of the London boroughs and the City.
The section 19 guidance makes it clear that the Home Secretary will take into account any representations that are made directly to him. The volume of letters that we have already received makes it clear that the authority's proposals are widely known and that the opportunity to make representations has been taken. The fact that I have received another 1,100 reinforces that point.
My hon. Friend spoke about new developments in the relevant areas. I know that the authority monitors new developments and keeps under review its assessment of fire risk. We have sought the advice of Her Majesty's inspectorate of fire services on the substantive issues that were raised in representations to us, including those that were made to me last week in correspondence on new developments. Because of the importance of the matters that have been raised by this application and the number of representations, we have sought the personal advice of Her Majesty's chief inspector of fire services.
Levels of fire cover are determined locally against national, recommended standards of fire cover. Those standards dictate the initial responses to a fire in terms of weight and speed of attack. The area that is served by Shooters Hill fire station is predominantly C risk, but it was made clear last week that just under 30 per cent. is classified as D risk. We shall not approve any proposals for Shooters Hill unless we are entirely satisfied that the national fire cover standards will be maintained. Shooters Hill already relies on neighbouring fire stations to meet the agreed standards of fire cover. In particular, the stations at East Greenwich, Plumstead, Woolwich, Eltham, Lee Green and Bexley supply second pumping appliance cover for the B risk area. I think that my hon. Friend would acknowledge that.
It is the responsibility of the fire authority to set a budget that will allow it to meet its legal obligations. In setting its budget for 1998–99, the London Fire and Civil Defence Authority will have taken into account the local government finance settlement and the criteria that were proposed for council tax capping. As part of that settlement, we are increasing the fire service share of standard spending assessment in England by £61.6 million. That is a 5 per cent. increase. It is a good settlement for the service and I am proud of it.
Under the proposed capping criteria, London was able to set a budget for 1998–99 up to £12.5 million, which is 4.7 per cent. higher than in 1997–98. That compares with an increase of 3 per cent. last year, 2 per cent. the year before, and 0.5 per cent. the year before that. If the authority thought that it could not otherwise meet its statutory duties, it was open to it to set a budget that was higher than the proposed capping limit and to apply for redetermination of the cap. It has chosen not to do so. That decision was entirely for the authority.
The application for my right hon. Friend the Secretary of State's approval for the closure of the Shooters Hill station has now been under consideration for four months. I make no apology for the time that we have taken. Such an application raises sensitive issues and it is important that that they and the many representations that we have received are given the most careful consideration. However, it is important to state a vital principle. These decisions are taken locally—in this case by the London Fire and Civil Defence Authority. The role of Ministers is limited to being satisfied on advice from Her Majesty's chief inspector of fire services that such decisions do not affect a brigade's ability to meet its statutory obligations.
In fairness to the authority, it is right for us to aim to make a decision as soon as possible, but, before doing that, I shall want to reflect carefully on the points that have been raised in the debate and on any other information that my hon Friend passes to me.

Question put and agreed to.

Adjourned accordingly at seven minutes to Ten o'clock.